Saw this in a press release this morning and almost spit out my coffee!
- Children average $30 a week in allowance
Daaaang!!! Inflation sure has gotten crazy over the years! That is exactly $29 more a week than I got as a kid, and $28 more/week than I got when I was a teen ;) Which wouldn’t have even covered a measly pack of baseball cards so I was forced to go out and work a job! (And looking back maybe that was my parents’ evil plan all along?! Haha…)
My kids don’t currently get anything a week except for love and encouragement and some good ol’ quality time with dad, but the topic of money has started creeping up more and more now so it’s only a matter of time until we have “the talk.”
And if I’m being completely honest, I’m not sure where I stand on it?
Do I just copy what my parents did and shell out $1.00/week per kid since it’s nice and easy and I came out relatively (?) okay in the end? Do I double or triple it and not put my kids through the agony of scouring $1.00 Target bins?! ;) Or do I do what I see other finance bloggers doing and just tell them “you contribute to this house because it’s the right thing to do whether you get paid for it or not!” Haha…
Open to any and all opinions if you’re willing to share – I know you have some! It’s just as juicy as politics and tipping and maybe even religion! Lol…
(And I have to point out – my meager allowance in youth *did* come with responsibilities that my siblings and I rotated doing every week, which I 100% plan on implementing with my kids too whether we compensate them or not. I want everyone learning they need to help out around the house!)
Here were some more stats from the AICPA survey (American Institute of CPAs), which was the same place that brought us that Personal Financial Satisfaction Index from the other month too:
- Kids are averaging $6.11 an hour to do chores, up 38 percent from 2016 (crazy!!)
- Two-thirds of parents give their child an allowance
- Four out of the five parents who give allowance expect their children to earn it (I like this)
- 3 percent of parents say their kids primarily save their allowance
That last one there hit me even harder than the $30/avg stat (which, btw, *has* to be for older kids and not the younger ones I’m thinking, right?? And at what age do you start phasing this stuff out anyways??!).
If you swap that last bullet it means 97% of all these “kids” getting their freshly earned allowances are then turning around and blowing it!! Which is nothing out of the ordinary since again – they’re kids – but what a great time to instill some good ol’ fashion personal finance virtues in them while we’re at it! The benefits of saving, budgeting, spending wisely, giving, etc etc…
It seems like this was actually the MAIN point of that press release by the time I got to the end of it (well done, guys!! You hit us with the shock and then snuck in the moral!!), and reminded me of an excellent book I was once passed that I now read to my own kids today:
“Three Cups” by Tony Townsley and Mark St. Germain
(Only a couple bucks on Amazon* right now! Highly recommend! (*affiliate link))
Here’s the brief from their website – 3cupsbook.com:
“As new parents, my wife and I wanted to find a way to teach our children about money, so we agreed on using a weekly allowance to accomplish this. We thought it equally important to teach our children good values as related to money (saving, spending and charity) to help them develop positive habits early on that would last them the rest of their lives.
This was when we came up with the idea of using three cups. We’ve tried to teach our children that it is not how much money you have that is important, it’s how you use it. The three cups we have given them have led us on many wonderful adventures together and have brought our family a lot of joy. We hope you will experience the same joy, excitement and success using three cups with your children…”
“It is not how much money you have that is important, it’s how you use it.” <– That line there says it all! And it’s written in a way that’s super relatable – and doable! – for kids too. Every time we read it my boys want to go through the cupboards and start pulling out all our mugs ;)
I’ve never really harped on it and gotten them to actually *follow through*, but I’m thinking they’re finally at the age where it’s time to discuss this stuff more seriously, and perhaps this 3 Cups idea might just be a perfect starting point?
Imagine if you did this with your money your entire life???! And how much you’d have in saving right now AND impact in the world??
Not to mention how easily lifestyle inflation would have been kept away?!
In fact, you know someone else who does this that I just remembered?? Angelina Jolie!! She saves 1/3 of her money, spends 1/3 of it on living, and then gives away the last 1/3! Easier to do when you make “stupid money” as she puts it, haha, but still a damn worthy way to spread it around…
At any rate, food for thought today, and would love to hear how you feel about the whole “allowance” thing… Do you give any of your kids money every week? And if so, do they have to earn it? What did your parents do growing up?
I’ll report back on my own experiments as they go, but you can bet your sweet patookus I won’t be shelling out $30/week to any of my kids, I’ll tell you that much, haha… Ain’t nothing you need that badly that we don’t already provide! Plus – there’s something called “yard sales!”
See ya down in the comments…
On another inflation-related note, did you know the Tooth Fairy now pays out $3.70 on average per tooth?? It’s a wild time we’re living in, friends!!
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Hi Jay! Coincidentally, I just wrote a post about allowance this week too. I’m not sure how old your boys are from your article, but I think mine are a bit older, ages 10-19. We give more allowance as the kids get older, but they also have more things they have to spend out of it, such as school lunch money and going out with friends money. No more hitting up Mom for cash every time they go to the movies. (Marvel is a movie making machine these days!) And the eldest aged out of allowance when she finished high school. We also encourage (enforce?) giving through our “charity jar” system, which sounds like one of the “3 cups” you mention in that book. Oh, and I didn’t mention this in my article, but the tooth fairy here just increased her rates to $3 Cdn (roughly US$2.25).
Hey! Like minds!!
I can get down with giving more if it takes away from stuff we already buy them… In theory you could keep adding to it too like for clothes shopping, toothbrush shopping, etc etc…
I wonder if these stats above account for that? Would make a lot more sense :)
I only remember getting an allowance when I spent the whole week away from my parents while I was in high school. It was about $20. I spent some and saved some… good memories.
I was thinking about this topic lately even my older daughter (6yo) does not really care about money yet. My question would be, can you give them such a framework like the three-cup one when you yourself do not follow it? I am not sure. I think kids learn from your actions so what I want to pass on is the thinking process when we are buying something. The distinction between wants and needs, when is acceptible to go for the wants and how much of them should you go for. For savings, she does collect some coins and has a piggy bank but it is not full yet so I am looking forward to teaching a lesson once we open it up. That’s all for now but I am very curious about the future.
Good point about teaching something you might not do yourself ;) We don’t do the cups but I sure would love to one day!! What a thing to strive for!
I give my son his age in dollars for allowance (7), so it will continue to go up every birthday. He is required to divide it up into:
40% – spend
25% – save
25% – invest
10% – give
He knows invest is for college. In the save jar he has baggies for different savings projects. From this jar of money he has to buy holiday gifts for Mom and Dad, so that’s a constant baggie. Other baggies change, a current one is for a drone. Give is for a project we chose together, although he has also thought just giving dollar bills out to friends randomly was how it should be used. LOL
The spend jar is for random purchases like racing cars from the grocery store. He has sometimes chosen to put his spend money in his save jar (yay! message getting through!), but most of the time he blows it on things like $1 toys. Our plan is as he gets older, he will be responsible for buying his own items with his allowance, such as clothing. As we implement this his allowance will increase accordingly. Hopefully we are setting him up for some good finance basics.
I do kinda like the “per age” idea in terms of being easy to remember and knowing what to expect… And even more so if they start using the money to get “needs” too as they get older.
Hi! I’m a 90s kid and never got an allowance nor money for doing chores but I was given money by my folks to occasionally see a movie or go bowling or hang out in the mall and eat junk food with friends. But I did start working really young. Like 14 years old. As did one of my good friends. From a young age we were doing shifts in fast food joints, supermarkets, bakeries, selling stuff in those pop up stands in the mall around Christmas time, making beds in hospitals, etc. It MIGHT have turned me into the hard worker I like to think I am today (or maybe I was born this way? or other?). I know it certainly taught me the value of a dollar. But when I visited this friend of mine recently, now a mother of a teenager herself, she commented that looking back she kind of regrets all that time working for below minimum wage. We both come from families with enough money that we didn’t NEED to work on the weekends and during the holidays. She commented that she feels like she lost a lot of time in her youth when maybe it would have been better to just a be a kid a bit longer. And I think I agree with her. Adult life can kind of suck: bills, jobs, responsibilities, etc. Maybe having a few extra kid years would have been better? PS: I got fired from McDonalds at age 15 for eating a McNugget. And I’m still glad I ate it!
Prob tasted damn good ;)
Interesting to think about the working vs “being a child” thing… I feel like with everything there’s a happy balance, but I guess if I had to side with one I’d side w/ the *working early* one. Just because you learn so much about life and career and money and everything and really can’t fully appreciate “kid time” until it’s gone and you’re an adult :)
But I’ll have to marinate on that more…
We give $10 a week to our eight year old in exchange for chores. $7 to her; $2 to savings; and $1 to the church. We use mason jars so there is a visible accumulation and try to teach financial literacy.
The *visual* part there is key – I agree.
I may have gotten $20 a month when I was in middle school. My parents told me if I wanted a car, go to the movies with friends, etc., I needed to work a part-time job. So now I’m a (retired) expert Big Mac assembler.
Our oldest child is only 4 so we haven’t gotten to the allowance point yet in parenting. But my wife and I don’t plan on giving $30 a week. Our children will earn their keep by doing basic tasks like keeping the house clean, etc. We might pay them for doing unordinary tasks like collecting eggs from chickens in the backyard (we might get some in a few years) or helping an elderly person clean their house.
We also want to do something like the Three Cups principle for doing giving, saving, and giving.
I WANT TO HELP W/ THOSE EGGS!!!
It’s a dream of mine to have chickens and fresh eggs right in the back yard :)
Couldn’t pull it off on this move but it’s going back on the list for the next one!
My wife and I take a mixed approach to this. Our kids don’t earn an allowance or get paid for regular household chores. We expect them to contribute to the family by keeping their rooms clean and helping with the dishes.
But, they do get plenty of opportunities to make a living on side hustles. Want to pick up the yard so I can mow it? Well that’ll earn you a buck. My wife resales clothes through Poshmark and she has our daughter’s earn a quarter per task when helping her. They go on and like and share items to help boost her sales and they get a quarter per click. They also help with her marketing inserts into each package.
The first couple of weeks they blew this windfall of $3 at the dollar store but they soon learned with harder work and saving they could afford a nicer toy.
Haha… always a hard lesson to learn, but better at $3.00 than $300 when they’re older!
One day I bet they can help your wife *find* the best clothes to hawk too since they’ll be in the know of all the latest trends :)
What happened to the $1 a year rule? My kids are in there 20’s, not that long ago!!!
The “$1 a year rule” is $1 per week for each year of their age. So a 16 year old would get $16 per week.
Ahhh gotcha… makes way more sense, lol….
Wow. $30/week? I used to beg, plead and bargain for $30/month to spend on my personal items!
My parents gave us a few bucks a week, but I starting “working” (babysitting) at 11, newspapers, mall jobs… so my parents bought me my school related items, uniform, etc. I bought my own after school clothes, outings, etc. I so wanted to earn on a budgeting/game system, but they just assumed we knew we should save (and I did but not nearly the way I should have).
Geez, this post really brings me back a few years. Let’s not count how many.
All in all, no, I do not support $30/week unless they are working really, really hard. Not just dishes and room cleaning.
Good to dive back into yesteryear every now and then ;)
Re: “I’ll report back on my own experiments as they go, but you can bet your sweet patookus I won’t be shelling out $30/week to any of my kids, I’ll tell you that much, haha…”
Yeah, mine neither, although I do reward them handsomely for report cards. $50 for a perfect card and an additional bonus $50 for a perfect year. Never thought I would actually have to pay it but last year my 9 year old got me for the full $250… Worth it though.
Also, thanks for recognizing my Patookus as sweet, I have been putting in extra time in the gym.
Report card grades!!!
Forgot about those!!
I’d get $1.00 per A on my reports too… And then it switched to like ice cream or something after getting straight A’s a few times haha…
Either way – our oldest two are going to start getting them now so need to come up with something :) Although instead of A’s and B’s it’s like O’s and R’s or something in elementary school?
Sounds like we have similar views to others of your readers. We started with an allowance at the age of 4 but we do half of your age. So he got $2 a week that year and at age 6 he is up to $3 a week. We provide his allowance in quarters to make it easier to split out. His piggy bank has four sections: save, spend, give, invest. He has to put one quarter into each of the four sections and set aside one quarter for church. He can choose what to do with the remaining quarters. Unless he has his eye on a specific toy, he tends to spread them evenly across all categories. Which is easier in these even years. At 5 with 10 quarters he would get frustrated sometimes.
As for what he does with them? Once invest gets to $100 we will put it into a CD for him. I am hoping at the age of 10 to introduce him to the stock market (a la Jillian/Montana Money Adventures and her post on Halloween candy). The give portion has been used to buy food for the hungry and school supplies for the needy through organized programs in our area. His save section gets regularly deposited in a savings account where he earns okay interest as there are kid specific incentives where we bank. And his spend section typically goes straight to the Hot Wheels section of the grocery store. This makes me sigh. But at least he understands that we don’t buy him toys anymore except for a special occasion like birthday or Christmas.
Sorry for the long-winded response. It is just that we feel like our method is really working and I want to share it with everyone!
I am taking notes!!
I like that you break it into quarters to make it easier!!
And *looks* like a lot more money too which is always exciting, haha…
While 30 feels too high to me, I think there are lots of good ways to approach this. Personally, we give them a dollar a week for how old they are (currently 13 and 8) and require them to give at least 10% and then encourage them to save half but require them to save something so that they get it in their heads that it’s a good idea to live off half their income and they should always save something. We also require chores of them but we find screen time is a greater enforcer of chores than money. Plus they have to do it simply because they are part of our family.
We give them a generous allowance because I believe you can’t learn to handle money unless you actually have some. When they want something and we tell them to use their allowance to pay for it they get a better feel of whether it is worth it or not. So far I’ve learned that candy and video games are definitely worth it.
At least they’re consciously choosing it!!
And much easier to put it back on them too when they ask for stuff than when they don’t get an allowance at all, so I will give you that.
Our 12 year old son gets $200 a month. He does do a lot of chores and animal care. 25 percent goes straight to savings and the rest is used for his expenses and wants. Dentist time with $15 copay, he reaches into his wallet and pays the copay. Halloween costume? You got it straight out his wallet. If he wants chips when we grocery shopping, he pays. We involve him in financial decisions so he sees real world what it looks like. I grew up in a family where money was NEVER discussed. This system has allowed us to help him learn about price per unit, how expensive clothing is if you just buy it off the rack, balancing out needs vs. wants. We are putting him in charge of his spending from an early age and showing him how to build up savings. I love hearing him tell his friends “let’s find something free to do because I don’t want to waste my money”!
He’s going to be better than 90% of adults in the real world :)
I was never raised like that so it’s such a foreign concept to me, but i’m gong to really mull this route over as I do agree – and love! – that they’re in charge of so much early on…
what age did you start doing this at though? 10?
Time to make a new allowance line on your budget spreadsheet for Babies Penny, Nickel and Dime!
Haha yup! In due time…
We want our kids to know that Work = Money (and Money = Work) so that they don’t grow up thinking someone should give them money just for existing :). Also, in this life there is work that you do for yourself that no one owes you anything for. So, they have responsibilities around the house that they don’t get paid for, like cleaning their own room and doing their own laundry. However, they do have opportunities to do extra chores around the house to earn money (if they do my work for me, then they get money from me!). All their needs are met because they live under our care (a spiritual principle), but a “want” requires working and saving, or asking for birthdays and Christmas. If they want pocket money, they are encouraged to get a job. They have regular babysitting gigs, lawn mowing, helping neighbors with yardwork, selling baked goods and lemonade, one of my sons even taught piano lessons to younger kids when he was old enough. I want my kids to always connect the thought of “I need money” to “I need a job”!! Fast forward several years and now my oldest two are going to college debt-free because they have connected work with money. In fact, my daughter attends a college where tuition is free because every student works on campus. My other son worked hard to apply for and earn scholarships (he now works on campus to maintain the tuition scholarship). It’s a lie that debt is inevitable for young people who want to go to college or live independently. But, they need to learn that money comes from work.
Oooooh loving that free tuition/working on campus idea!! Is that a normal “thing” out there for some schools now, or just particular to your area/school? Never heard of!
A few colleges across the nation follow the tuition free work model. We just happen to be living near one of them: Berea College, http://www.berea.edu. There are others, including College of the Ozarks: http://www.cofo.edu. If you google “tuition-free colleges” – they’re out there! Berea is competitive to get into, but if your academics are good, you can attend school and graduate with little to no debt. My daughter has worked as both a costumer in the theatre department and in the college’s media and communications dept. fixing things on the website. She will graduate with a 4-year liberal arts degree and zero debt.
YAY!! Very cool!!!
I actually got a media/design degree myself back in the day so I’m all about your daughter’s path ;) Thanks for coming back to share all this!!
You might want to sit down for this. My daughter gets $122 every other week. I call it a salary, not an allowance. She has chores, but they aren’t tied to the money. She is expected to put 10% in give and then split the rest 50/50 into save and spend. Her save isn’t hers to touch yet, I’m not sure when it will be or how that will work. Her spend is split yet again and she has 1 account that has a $150 minimum balance to use for responsibilities (school fees and trips, clothes, gifts, going out with friends, lunch money, etc). This account is meant to mimic always having money available for needs like rent, groceries, utilities, etc so she isn’t ever unable to cover those things. Once that is met, she can choose what she does with any money left over. I calculated the balance by pulling together what I anticipated I would spend on all this stuff anyway, divided by 26 paychecks a year, adjusted to allow the give and save, and landed on an amount. Each year, she has additional responsibilities added to her list of items that is on her to cover and she gets a raise. The one thing, as others have mentioned above, she knows not to ask me for a dime outside of her salary. In my mind, I’ve spending the same amount of money I would, but I get to avoid arguments like how unfair it is that I won’t buy name brand leggings because she needs new black leggings. She gets to decide if she wants to put money toward that or have money to go out with her friends. It hasn’t been perfect, but I’ve heard her make several comments that gives me enough data to know she’s getting it.
How old is she? This is SUCH a brilliant idea. I already track expenses related to my 9-year-old separately and know what this monthly/biweekly amount is. I think he’s too young right now to be responsible for managing all that, but I can definitely see this being very good for him at 15 or 16.
Thank you! My daughter is 14 but we actually started this when she was about 8 and just started with very small responsibilities. Her first year was simply transitioning her to buying her own wants (candy bars, little toys, etc) and it grew little by little from there. You can click on my name and it will route you to my blog if you are interested in reading more of the detail.
Going right on my “ideas” list to talk over w/ the Mrs…
The funny part is that it doesn’t cost you anything *extra* either, haha… But to your kids it’s all extra money!!! :)
WOW! $ 30 a week! No wonder most american parents can’t even save 5 %, AND are struggling to keep up with car payments and house payments. INSANE.
My wife and I debated this, prayed, and we give each of our 3 older kids $ 5 a month. They have the potential to earn more than that based on performance. That $ 5 a month is predicated on them completing their long list of chores.
I get paid once per month (end of month) and so do my kids. We try to give them all the love we can while saving a ton of our own $$$ and saving for their college. I’m shocked to see this $ 30 per week…..
After reading a lot of these comments it has to be tied to something more – like paying for clothes or other things that parents typically do.
At least that’s what I’m hoping for now :)
12 years and 14 years. $30 a month, not tied to chores, although chores are expected. They have bank accounts with debit cards. Any money they receive over that amount (gifts, babysitting money, etc. ) is moved into savings.
This is their “fun”money. They are expected to pay for birthday gifts for friends, snacks at the movies (we are too frugal to buy overpriced snacks), school lunch (if they choose not to pack their own from home), outings with friends, and any other items that are beyond actual needs.
This has made them much more conscientious of what invites they accept and where they choose to go (an outing with friends for Boba vs. a lunch date is just as fun and less expensive!) They rarely buy useless items and hit thrift stores when they want new (an unnecessary clothes).
This may not work for everyone, but it has been great for us.
This seems great and probably what I’ll lean toward with my kid when he gets to that age (sooner than I’d like to think about!).
thanks for sharing!!
Our oldest girl is turning 13 and receiving $60 a month doing routine chores on wkends- whole house vacuum, do her own and her little sister’s laundry, tidy her own room and rotate with an 11 yr old sis to clean their bathroom and all of them get to do folding sesh while watching netflix, take the trash out, walk and feed the dogs, etc. She can either pack her lunch and she also has a lunch acct at school which I put money on. My issue with her is being so overly giving and generous to a fault with her friends. I’d find out even if she brings lunch from home, she’s still charging lunch from the account telling me that her friend asked and felt sorry the friend forgot to bring. On Fridays after school or on minimum days or after sports practice, my van would easily be packed with friends wanting to eat out, get boba, starbucks, froyo, acai bowl you name it.. and all too sudden, around 2 or 3 friends “forgot” their wallet or they don’t have money so I would end up taking the tab that’s on top of my own 3 kids. I’d hate to think some kids feel entitled and know how to take advantage despite the fact that their parents give them allowance. I need to teach the value of establishing healthy boundaries as well WITH this whole financial management thing.
Once in a while its okay but if its all the time, it all adds up and definitely breaks the bank. I have way too many bills to pay and really cannot afford to be the boba fairy. I don’t even want to count the times when everyone just hangs out in my house with free reign and access to our ref and pantry. I even encouraged that just so I can personally meet my kid’s friends but man! ♀️
$30!! That’s bananas.
I have a 9-year-old who gets $5/week from me. He has responsibilities every day that he’s at my house (50/50 custody). On school nights he can earn up to 20 minutes of screen time by doing certain things. Two he MUST do (feed the cat and do his homework) and others are optional, up to two more, including things like picking up the toys/dishes/etc from the living room, helping to make dinner, vacuuming, wiping down the bathroom sink, putting away some dishes, etc. He often comes up with creative ideas of how to earn these points. His allowance isn’t *directly* related to those chores, but he knows he has to help out around the house.
He gets that $5 through a free app called Rooster Money and I have it set up to automatically divide so that he gets 50% in “spend” and 25% each in “save” and “give”. I did it this way because he was feeling frustrated by how little he got in spend each week at 30/30/30 and I wanted him to stick with this practice. We’ll have a conversation about adjusting it when he’s older. He finally has about $35 in his “give” pot so he’s been brainstorming ideas of who/what he’d like to give to, which helps him talk about what is valuable and important to his vision of the world he wants to live in.
Thanks for bringing up this topic – it’s great to hear how other parents handle this.
You could be right on that 30 cut being way too little…
Hadn’t heard of Rooster Money either yet, so thanks! Making notes about all of this! :)
My son got $250 last month. But that’s for helping me charge Lime scooters. He gets 50% and we put it in the UTMA account, invest in S&P500 at Fidelity.
He’s really good with saving. The only thing he wants to spend money on is the tablet. $2 for some skin for his games. I forbid him to spend money on virtual crap so he’s saving everything for now.
A little hustler!!!
And super young too, right? Isn’t he around the same age as my oldest – 7?
My daughter is 10 and we give her $20 a month. We don’t tie her allowance to any performance and we don’t buy any toys, books, or extra things that she wants during the month. It’s worked pretty well as a way of letting her experiment with money and see what works best for her. When we started she did spend ALL of it every time but then she got into some situations where she couldn’t buy something more expensive that she wanted. Now she keeps about $200 as her base and will save up to that if she’s spent it down or will donate or long-term save depending how she’s feeling. We were very swayed when we set this up by an article about Warren Buffet (that I can’t find now) he was saying that childhood is when you want them to make mistakes, such as finding out what it feels like to be broke etc, so just let your kids spend their allowance how they want. It’s worked great for us.
Amen on that!!
Learn on peanuts so you don’t lose the farm!!
I think allowances are great, especially when you have siblings. Having three older ones showed me three different ways to use money. One was always hustling to make more money and spend it on his love- cars- which became his career. One was always blowing it, complaining about it and asking for more. He still does. He’s 60. That taught me that people find this incredibly annoying and I lacked respect for him because of this. One saved it for college. I was in the middle; didn’t want to ask for things, so I’d save for extras, but no long term saving until college was right around the corner. Better planng and I wouldn’t have had three roommates and three jobs in college. ouch.
We also had the sliding scale. It went up, but you had to buy more with it. By 17, pretty much all the parents paid for was roof, food, and some parent-approved clothing items. (They knew if they wanted me to wear stupid girly dresses to church, it was on them. HA !)
But I’m not shocked at the thirty really. Back when I got a dollar a week, that dollar bought a king-sized candy bar and a comic book. I’m not sure what that would cost now, but I’m all for building in inflation.
Super insightful growing up with others like that :) Probably even more so in life in general than just money too!
I decided to start paying my kids allowance because it seemed like every time we went to a store, they’d ask me to buy stuff for them. They got $5/week, enough for a pack of Pokemon cards. Then when we went shopping and they wanted me to buy something, I’d say “use your allowance”. If they wanted something big, they had to save up. The most important thing was that I didn’t tell them how to spend or save. I let them figure it out. If they blew the whole $5 on a pack of cards, they’d have to wait a week to get more money. They learned pretty quickly how to manage that $5 to get what they wanted most. Over the years, the $5/week has grown to $25/week. One of my kids ends up saving most of it (he lives pretty simply) and the other spends it all (he has a girlfriend!). But they both know clearly the value of their $25 and the consequences of their spend/save decisions.
How old are they now? When did you start this?
Thinking at 5 and 7 it might be time for my oldest two… One of them is constantly asking me for stuff wherever we go and none of my minimalism talks are working ;)
Sadly, I find this too easy to believe.
We used to give the kids an insane allowance by my standards to do household chores. $5 per week to my stepson for taking out the trash and $20 per week to my stepdaughter to do the dishes and laundry. Problem was, they never did it, and we ended up spending more time nagging them to get it done than it would have taken us to just do it ourselves. So we’ve completely nixed that idea and now give them zero allowance. Any money they get only comes from them actually completing a household chore and agreeing upon a set compensation for that chore ahead of time.
Unfortunately for us, it’s a whole different world when they’re with their mother, so they don’t really ever have to learn the same lessons about working hard for your money. Over there, there’s plenty of free-flowing money to go around for brunches, spin class, acai bowls, I can’t even write anymore because I’m cringing too hard ;)
Raising kids after a divorce/separation certainly adds another layer of complexity to teaching your kids financial responsibility!
I bet :(
And finances is only one of the millions of things kids need to be taught early on (and uniformly). Must be super confusing for them at times :(
I think we’re in the same boat. I have to organize my thoughts on this one, but I like three cups. I had two ideas that came to mind before I read that.
First, I like the idea of a small base allowance for basic chores. However, I’d like to be create incentive for them to earn more by doing more.
Second, I would like to incentivize them to save and give through some kind of matching funds (like a 401k match) from us. Hopefully the free money for later or doing more good will push them in the 3 cup direction.
I like the matching idea too :) I think the trick is not overly complicating it though so I feel like if you do a matching one you can’t implement a bunch of the other routes – at least all at the same time? Let me know what you end up trying out and I’ll do the same :)
I lead a FB budgeting group and a member asked why we recommend folks don’t tie allowance to basic chores that are just part of being a family member so I did a deep dive into the research If you have any interest in a ton of links and info, I can send you an email with my summary.
My kids start getting an allowance to learn money skills at 3 and they get one quarter for each year of age while they are little so $0.75/week at 3. When they get older, we expect to move to the $1/week model and also help them start to budget for their portion of our budget focused on kid/family activities too. Like showing them why we can’t go to a water park and the movies and eat out and the fair all in one month.
Yes please to your data/links!!
Thinking of compiling a follow up post of everyone’s tips/ideas here and would love to include it after I devour it :)
budgetsaresexy (at) gmail
Just saw this and emailed it over! I am probably too late to be helpful!
I tried the three cups thing but hated keeping up with it. I’ve tried paying for chores but they weren’t motivated to work.. My hard working, social 17 year old pays for most of her stuff(clothes, food out) but I’ll pay part of some school clothes and her church camps. Church items are an investment in character. My 15 year old teen introvert doesn’t care about working so we pay him $10 to mow the lawn and that keeps him happy along with some other neighbor chores. We still buy him shoes and pay for hair cuts. clothes are gifts from grandma. The 11 year old is ‘saving’ for an iPad. Once a year birthday money is his only source and he likes to buy treats with his older brother. I’m hoping he never saves enough for his iPad so don’t give much. $1 gold coin for each tooth. The teens both have Visa debit cards. I agree that kids learn what you do. We go out to eat for birthdays or vacations. We shop at the thrift store. We buy store brands. We don’t have cable or any other subscriptions. We had free data limited phone service until high school forced better service. We pay for phones. Good luck. I think being flexible and changing as you go is important. A rule today might change with different children and circumstances.
I think you’re right on that last part – gotta keep that in mind so we just START and not wait until we feel like we have something *perfect*! They change so much as it is as young kids so it really shouldn’t be that surprising, haha…
I did not get allowance growing up. We were members of a family and we should all do our part. I raised my daughter with this same belief. My daughter is 27 now and independent and we discuss money often. I wish I had given her allowance. Not necessarily for doing chores, but more so to use it as a easy way to teach her to save. But it definitely would not have been $30/week.
Yeah, the teaching/experience lessons are the best parts of allowances – at least to us adults ;)
Older kids, 15 and 17, and they get $30 every other week. I get paid, they get paid and parental payday loans are not an option. They cover most clothing and all wants. This started a couple of years ago when we divided up the amount we spent on clothing, added some for discretionary spending and told them they were in charge. I don’t require that they save or donate any, I don’t pay for grades and I don’t pay for chores (those are simply expectations). Most of our giving is done as a family unit and we discuss what, and who, we want to support. It made no sense to me to try and get a 12 year old to care about college savings for the relatively small amount she would be putting in. We tried it and all we got was resentment and arguments, and that was not the hill I chose to die on. We took a long term view that learning delayed gratification and wants vs needs was the main skill we wanted them to have. When my oldest got her first job she was prepared to start aggressively saving for college as well as planning for a social life.
I think they will be okay as adults. They will make money mistakes (we all do) but it will be mistakes, and not the result of a poor relationship with, or understand of, money and how it is earned and used.
I think you’re right on that one – well done mom :)
I like how you track “lifestyle indexes”. :) This is always fund to see how the market changes for lost teeth and chores ,etc. :)
So on to my theory on this stuff.
I’m a self-proclaimed minimalist, so i tend to try and find ways not to just teach about financial responsibility, but responsibility with ones time, energy, and stuff. Having too much “stuff” has its own consequences, just like having too little. A lot of my belief aligns well with Montessori principles, and thus had a conversation with a colleague years ago that completely shaped my approach with the kiddos:
He grew up going to Montessori through high school and his parents were big believers in the principles especially when it comes to equipping independence. From that stemmed an incremental independence structure they setup for him and his sister. They started at year 0 (Kindergarten), and sat down and created a list of responsibilities they have on behalf of their children and on behalf of their household. Then they juxtaposed cost against those items.
For example, on behalf of young children you buy clothes and wash them, buy groceries and cook them, and prepare their school stuff/fill out forms/etc.
On behalf of the house, they cleaned, did laundry and performed yard work.
They ranked the activities based on complexity, time required to perform, and reasonable age a child is able to manage the activity. They then assigned a cost to those items calculated from things like “what it would cost to outsource this activity, like a maid” and what someone of their education level would average being paid out in the open market. Items that were self serving (buying clothes) were only assigned budget for the items, not for the work of doing it.
Then, each year, starting in kindergarten, they’d give them the activities aligned with the age and the budget required to do it. For example, in kindergarten, they’d give the kid responsibility of taking all their laundry to the laundry room and sorting it, or picking up around the house. Then, at the end of the week, they’d “pay” them for their work. If the work wasn’t completed, they wouldn’t get it.
As they got older, they took on ownership of small budgets, for things like clothing and eventually budget for lunch. My friend’s dad allotted him $300 on jan1 after his 10th birthday and told him that moving forward he would be responsible for planning and purchasing his own clothing. This came from a conversation (argument lol) about a pair of shoes he really wanted. So his dad realized it was time he learned about his clothing budget. He quickly bought the shoes, and ended up spending most of his budget early in the year and when winter came, he had to wear a small jacket bc he ran out of money. Needless to say, he learned very quickly about planning for back to school shopping, and ensuring you have enough money for September, when you’re planning in January.
Anyway, my point of this story is that just like money is a conduit for necessity, the introductions to money should be a conduit to independence and money management. I think save/spend/give is important, but how to spend (budgeting) and how to save, are the key lessons and so much of why so many people have issues with money. They didn’t grow up practicing with small amounts of money, so it became daunting when they got grown up amounts of money.
To conclude the story, by the time my friend was in high school, he managed the family grocery budget, his own clothing and school budget and even began dabbling in investing with his dad (started his first IRA) with his extra budget money. He got a credit card in 9th grade and learned early what would happen if he didn’t pay it off on time. He also learned to manage his accounts because all the money he received was given to him in an account. He also learned about credit card rewards and the benefits of different cards.
He even learned to bargain with his sister for her work, so he would get her money, for activities like school trips and going out with friends. Once he realized there was a cap to what he could earn at home, he realized he had other skills that could earn him money outside the home and he got his first job and started his first business.
I think his dad was a genius by setting up a home economy that aligned with some real world numbers that let the children learn early on how much things are worth, how much effort certain things take, how much time these things take (and in turn respect for their parents and what they do!) and how money is either a tool or a curse depending on what you do with it.
Today he is financially independent at 35 years old, and a senior software dev manager. He lives very minimally with his girlfriend in Seattle, in a one bedroom condo he bought and paid off, has no car, and spends his money traveling, enjoying the outdoors and eating well and giving back what extra he has that he doesn’t need.
Kudos to his dad!!! I’m taking notes for my own kiddos.
Love that happy ending! And really seems like it was pretty happy throughout too as time progressed – very smart to do it in phases and slowly work your way up like that. I don’t know if I’m organized enough to mimic something like that, but I do like the overall concept and bet I could implement parts in my own way…
Saving this for the “ideas” list when we sit down to discuss it later (wife and I). So thanks!! And 100% right on the minimalist part. I gotta be better about implementing guidelines around that too for the kids.. Started a “one thing in, one thing out” rule towards the end of our yard sale season this summer and that’s had about a 50/50 success rate so far, haha… So work to be done still!
Give them a couple bucks a week and let them have fun. Speaking as someone who grew up in a family too poor to give me an allowance, I cannot tell you how many times I was embarrassed to be unable to buy things like snacks and such when out with my friends. Its a humiliating experience, and sure I saved all the money I got as gifts or from odd jobs, but I could never spend it because I never knew when I might get more. Five bucks a week isn’t going to ruin them for life. And yeah sure make them earn it with chores, but you cant act like the house they live in and food they eat is its own reward for their work, those are the costs of being a parent, not a debt incurred by a child.
Hadn’t thought about it that way before… Have to marinate on that for a bit, thanks!
We don’t give our 6 year old a straight allowance at all. We want him to value the money he gets by earning it. There are some things he is expected to do at home as part of a family and taking care of himself and there are some things he can do to earn money. For example, he has to make his bed, clean up his toys, help with his laundry, and feed and walk the dog without being paid. If he wants to earn money, he can help me unload the dishwasher for $1, vacuum two area rugs for $1, load and fold towels in laundry for $1, and help dad mow the lawn for $2 (we live in Chicago and our yard is the size of postage stamp mowed with a weed whip that snaps into wheels). He can basically earn about $0-$10 a week. This evolves as he gets older. He used to get $1 for bringing the small bathroom trash cans when we are bagging all the trash to go out but now he does that for nothing as part of our family. We of course provide his clothes, food, school supplies, and sports fees. He buys his toys (besides gifts). He has decided he wants a Nintendo Switch and has been saving since the beginning of August. He almost has $100 which I find impressive for a 6 year old. He used to be impulsive with him money. Now that he really wants something, I’ve finally seen him say no to other smaller things that he only sort of wants. He’s already more financially responsible than many adults. I don’t want him to be an adult graduating from college with 5 or 6-figure student loan and credit card debt.
Very impressive at 6! Took me like 3 years to finally get $100 for a Nintendo GAME BOY back in the day, haha… Which I ended up not even getting because I didn’t find it worth it by the time I had the money :) (And ironically years later picked one up for $20 at a yard sale – hah)
Heyyy! Let me first state that I don’t have any kids so take my advice with a grain of salt. However, I am an auntie and I take that role very seriously. I hate buying my niece & nephew crap for Christmas & birthdays so I don’t. I give scavenger hunts & adventure days with auntie for Christmas.
Birthdays have become a sort of tradition where I teach them about money. I pick a set amount that I want to give them. I put 50% into an envelope marked savings & this is a check made out to their parents to put into some type of savings vehicle for college or after H.S. Next, I put 10% (cash) into an envelope marked giving. They have to give it away to someone less fortunate than themselves or to a church or charity. Finally, I put the other 40% (cash) in an envelope marked spending. They get to spend this however they see fit as long as their parents approve.
I was telling my brother that I won $60 in the office pull for the NCAA tournament this year (dumb luck) and my niece chimed and said, let me guess you put 50% in savings, 40% you spent, and 10% you gave away. Smart kid!! It taught me that they pay attention.
Lastly, if I had kids I’m a fan of giving them a commission for doing some type of chore and diving it up into those 3 buckets. Not $30 a week though!!!
As a parent who has too much crap in her 2 bedroom Chicago condo, I appreciate this strategy. This is what I keep asking for my son from my mom and sister.
Have they honored your wishes?
Scavenger hunts & adventure days – yes!!!
I’d like that as an ADULT!! :)
I’m late to the game catching up on some reading but I love all the advice everyone has! I don’t have kids, but when I was a kid, my parents didn’t give me an allowance. They gave me a choice—they could give me an allowance but then they wouldn’t buy me extra things, or, they would give me money as the need arose. This was t really a choice because they were clearly stacking it in favor of not giving me an allowance. I still learned the value of money because they wouldn’t just buy me whatever I wanted. More often than not, they didn’t buy me what I wanted. And, I still had to do some basic chores like making my bed, cleaning my room, helping with dishes. I do like the sound of teaching kids to budget in some way though because while my parents taught me to decide if something was worth it, it wasn’t in the context of a larger budget.
I’ve put money in a kids account for my nephew, who is now 6, since he was born (And intend to for my niece who is 2…second kids, amiright?) And the last time I was visiting, and I was looking at my accounts, he asked me what I was doing. So I showed him my account and his and explained how I put money into it and it grows. He understands enough about money to know that more is better! he said “cool” which is a win in my book.
Agreed, haha… Well done Auntie ;)