Parenting Ideas: Allowance, Version 3.0

There are SO many complicated things to deal with in parenting and so many differing opinions on teaching good values. Like many parents, we have struggled to teach our kids the value of money and the importance of budgeting. We want our kids to understand how to save, sacrifice and make hard decisions. Just like we have to do (on a much larger scale) as adults.

We have tried a few different ideas over the years with varying degrees of success. For a couple summers we used the Quarter/Jar method. This worked really well except that it was hard for us to always have the appropriate cash on hand for payouts. The kids also tended to use the money to play, resulting in quarters getting lost or mixed up and we never had a hard account of the money. Last year we tried "puffy jars" as a behavior incentive for the kids. They were into it but in the end we felt like earning a prize every month wasn't really teaching them anything about money.

So we backed off of allowance for the summer and I started researching and reading different methods for teaching kids about money. I didn't find one perfect (for us) method so I put a few ideas together to come up with our own system. I don't know if this is going to be the perfect solution for us but so far it is working extremely well. I'm sharing these ideas because of the overwhelming response I got two years ago when I posted our quarters method of allowance.

Nuts and bolts:
- We are only using this system for Carter and Makenna. Carter is more into money and "things" than Makenna is but I know her time will come too.


Responsibilities:
- The kids get a checklist printed out every week. The checklist is broken into M-F and there are certain things they have to accomplish at different points during the day. Here's a picture:

And here's the task breakdown:

Morning: Make bed, get dressed, pack bag, teeth/hair, good attitude, be ready by 7:45
Afternoon: Behavior at school, homework, practice piano, good attitude
Evening: Set/Clear table, help mom, reading, good attitude

Our tasks on Friday are a bit different because we don't have school: Make bed, dust room, vacuum room, empty trash, clean bathroom, pack piano bag, extra chore (this varies from week to week)

The "help mom" task in the evenings was intentionally left very general. Sometimes I need extra help with dinner from one child and need another child to spend time playing/ reading to the little girls while I wrap up dinner or piano.

All of these tasks are completed without any prompting from me which has alleviated at ton of stress from our day, especially our busy mornings. At the end of the day a parent has to sign off on the checklist that everything was done for the day.

(A note about responsibilities: We are extremely busy this school year. We have after school activities 4 days a week. It's a lot. We have left the school day responsibilities minimal because we honestly do not have time to have them responsible for more.)

- Money: the kids are able to earn $1 per day M-F. It's all or nothing for us as a way to keep it simple. We have one kid who is a bit of a talker during school. That child has lost allowance due to talking in class and getting a bad behavior mark for the day. It may seem harsh but the kids are learning FAST.

- Payout: We knew that cash doesn't work well with our kids so we decided to open them a "debit account." At this point we are using the bank of mom and dad instead of a real bank but I think that will be a transition we make in a few years if we find this system works well for us. We gave C & M blank check registers and started their accounts with a small amount of money in them. At FHE each week we make a "deposit" for the previous week's checklist. We debit purchases out at the time the purchases have been made (only friend bday gifts so far).

- Financial Responsibilities: So the key for us this time around is making sure our kids don't just think of this as play money. It doesn't teach our kids anything about money to give them allowance and allow them to have free reign over their purchases. We decided that our kids need to pay for tithing and birthday gifts for their friends out of their allowance. The rest can be used how they want but they must ALWAYS pay their tithing first and keep enough to cover a couple bday gifts in their accounts should the need arise. As they get older we may add more ways to earn money and increase their financial responsibilities. We are going to Disneyland next month and have already told the kids they will be paying for some of their own souvenirs. This has gotten them very excited and they are working hard to earn their full allowances and not spend any extra money.

A couple good experiences with this:

Carter came home a few weeks ago really excited about the book order. He had circled a couple books he wanted to get. He asked if he could order them and I told him that he could but that he would have to use his allowance for them. He was a mad at first but it was a good opportunity to explain that Allen and I have to pick and choose the things we want to spend our money on too. We had a good talk about priorities, needs and wants. In the end, Carter decided money for Disneyland was more important than a book he could get from the library for free.

It's been a mind shift for me too. Last week I found some fun activity books at Costco that I knew my kids would love. In the past I would have purchased them but I decided to let them choose if it was something they really wanted and let them use their allowance money for them.

Interest: We are planning on giving the kids a quarterly "interest" payment based on the amount of money they have saved over the quarter. It will be significant enough (10%) that they see the value in saving their money and they will start to learn about interest in the process.

So that's it. After typing it all out in this LONG post it seems a bit complicated but once we set it up it has been easy. I feel like the kids are being MUCH more responsible for their own behavior and time management. It has alleviated a ton of stress/prompting/yelling on my part because they get up and work through their checklists without any help from me.

The one negative reaction I get to the idea of allowance for kids is, "oh, we don't pay our kids for chores/good behavior/grades/ etc." While I think that is TOTALLY fine for families, I still think teaching kids the value of money, saving and sacrificing is too important to leave until your kids are old enough to earn their own money (through jobs/babysitting,etc). Our plan may not work for everyone and I'm sure we'll be revising it along the way too, but I hope this gets you thinking about how you want to teach your own kids about money!