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Allowance: Helping Kids Earn, Spend, Save and Give Money!

My daughter is 6 and in the last few months, my husband and I have found it challenging to get her to do tasks around the house without constant arguing or whining. At my most recent session with my therapist, I shared my frustration regarding my daughter’s lack of work ethic and general bad attitude about doing basic chores around the house and asked for advice how to deal with this. My therapist wanted to know if my daughter gets an allowance. My answer was not really!

Although we have done different versions of an allowance system, we have never stuck to anything consistently.

When my daughter turned 4, I started giving her money for doing little things like making her bed and feeding the dog. Then when she turned 5, we asked her to do certain tasks for $1 a week. This worked for a while, but I now understand that because it would take a long time to earn enough to buy something, it was not motivating enough for her to learn and stick to the good habits our allowance was intended to promote.This image represents what my daughter thought her allowance would be like.

It’s a new year and time for trying new things! Google and Pinterest to the rescue! I Googled “kid’s allowances” and looked up “kid’s chore charts” on Pinterest.

Although there are several different schools of thought on giving kids money, all the experts agree that it should start early while the kids are young.

Basically, the idea is that when kids start comprehending that money is used to buy things, they can start earning it in some form at home. For most kids, this is around 4 years-old. Other takeaways for me that made sense were giving $1 per week times the age of the child. So a 6 year-old would get $6 per week. This way, the allowance money would accumulate at a rate where the child can actually get excited at the idea of spending it. Another idea I liked was that some tasks/chores should not be tied to the child’s allowance. Tasks like making their bed, keeping their room clean and getting ready for school should be done because she is a contributing member of the family.

I set out on Pinterest hoping to find a downloadable chart that I could just fill in with my specific allowance goals. There were a lot of great charts online- but none that was customizable for my needs. Using the examples I saw online, I decided to make one myself. I liked the idea of being able to change and print it at home if tasks and priorities changed.

Weekly task chart tied to our daughter's allowance.

Weekly Task Chart

What I created is a chart with daily tasks that don’t have a dollar value, daily tasks that have a dollar value and weekly/as needed tasks that have a dollar value. I also decided to put in a couple of items that my daughter would get fined for not accomplishing.

So now I had a plan and a chart but I still needed to get my daughter’s buy in.

In the past, she has shown excitement for charts and reward systems, so I was hopeful that she would be excited to try this. I framed it as something we want to try the new year to allow her to earn money and to help her become responsible with her earnings. I went through the chart with her and explained how it would work.

When I told her how much money she could potentially earn, her response wasn’t exactly what I had hoped for. “But mom, I already have a lot of money!”

Apparently, she had been putting a bunch of loose change and any little money that we had given her in her little piggy bank and had saved $17.00. Yikes – I guess she already knows how to save money! Since it had taken her a long time to save the amount of money she had, I explained that at $6 a week, she could more than double her money in just one month and that every 3 months she could use a portion of her money to buy whatever she wanted. This final point got her attention and my daughter got excited.

As parents, it is also important for us to use this opportunity to teach our daughter money management skills.

We want her to understand that while earning money is important, learning how to spend, save and give will give her skills to be successful with money as an adult. The formula we came up with as family is for my daughter to save 20% of her earnings and to give 20% to a charity she can pick out.   

Our allowance system is a bit more complex than a piggy bank, but saving will be included.

It’s been more than a week and things are going great. There has been less whining, less nagging on our part, and she is excited for payday! There have also been times when she has been fined for arguing and/or whining. I am sure we are going to have to tweak it as we go along and it will take work on our part to be consistent. I sure hope that this allowance will be the beginning of a solid financial literacy foundation for her.    

Do you give your kids an allowance?

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