Allowances for kids
What age did you start giving your kids an allowance? How much and how often? Do you force them to practice saving and/or giving? Do you allow them to buy whatever they want with their money, even if it is ridiculous?
My kids start getting allowance in grade one, and they get the equivalent of their grade/week. I have kids in grades 2, 5, 6 this year so their allowance costs me 13NIS/week. Another 6 years and then DS#1 will age out! Seriously though, I YNAB it with them. Each of their piggy banks is an "account" in the Kids' Budget. They've chosen to pool their resources to help them hit their savings goals faster. But we set up giving and spending (and saving) categories based on their wishes. They each budget their own allowances but they can budget to shared or personal categories. Next year DS#4 will start grade one and he'll get an allowance too. Yes, only 1NIS/week but what exactly does a 6 year old have to spend money on? It's enough.
One of the best bits of advice I've read on the subject of allowance and getting kids savvy and healthy with money was all about modelling. Parents model their responsibilities and accountability by going to work and doing their job. A child's 'job' is school, they are responsible and accountable to go to school, participate at their comfort level, keep their work organized, complete their assignments and attend. So their allowance becomes a salary...kind of neat I think :) I really like the belief that responsibilities to home and family are not something to negotiate with financial rewards, those responsibilities are to instil good habits in cooperative living and loving, respectful behaviours towards one's home and family.
If your child is academically inclined there can be consideration for using excellent test and assignment outcomes as an opportunity for bonuses. This isn't a one-size fits all solution but it is an interesting option.
This is an active discussion in my house currently - our kids are just getting old enough to grasp the concepts of money, so I'm super keen to follow this thread! I do think conversations about financial choices should go hand in hand with the start of allowance. Personally, I wouldn't force either child to practice one of the other when it comes to saving/spending/giving and honestly looking forward to the discussions around each.
Thanks for getting the Parenting Forum off to a good start!!
Such good timing! We just brought in allowances for our kids at the beginning of the summer and they're in grade school. We don't tie it to chores or anything but use it as an opportunity to teach them about money.
They each receive $1 per year old they are per week. 7 year old - $7 per week. It costs us less than $100 per month and took away all the Target purchases they wanted every single time we left the house. Now, they have to buy it with their own money and I don't have to worry about it!
We do have them set aside some for giving and some for larger savings (one of ours is saving for summer camp and another is saving for a hover car!) and the rest they can spend on whatever they want. They've bought some things that I consider unnecessary, but that's their decision and has turned into a great discussion when they want something else later.
The only other way they get extra dollars is for their grade reports. Since we consider school to be their "jobs", it helps to keep that a serious thing and focused on doing their homework and studying for tests.
I love seeing how differently everyone does allowances! In the end, whatever works for your family is truly what's best!
We started giving allowance at about the time they started wanting to buy things themselves (age 5). They get $1 per year of age every two weeks. We let them spend it however they want. They see us budgeting in YNAB and have learned how to save up for large purchases. When our oldest was about 9 or 10 he started wanting more money than his allowance so we've shown him how to sell some of his used things on craigslist and we've paid him for large chores (primarily lawn mowing).
I forget when we started, but my kids get 50 cents per year - so my 11 year old gets $5.50/week and my 9 year old gets $4.50/week. We have a great free app called Rooster Money, which is a tracker that allows you to "pay" them or take money out, and also for them to set goals that they save for. We have required them to set up one of their goals as tzedakah (charity money) and each week we ask them how much they want to put towards their goals. The expectation is that they must put money towards tzedakah (minimum 50 cents) and other goals are up to them. When they want to buy something, I pull out the app, show them how much money they have, and then they have to make choices because the budget is finite. The app has made such a difference in teaching them how to manage their money (not to mention we don't have to scramble for cash every week).
No kids myself yet, but i got paid for A's in school . Report card time, every A was $10 i think . ( I got straight A's from grade preK-12) so my parents got a little lax with that. But I also had a job at age 16 and paid all my own gas and spending. I was a full time athlete and my parents paid for ALL of that, so it was pretty fair.
My kids have gotten allowance once they were old enough to start doing chores. $1 times their age. 100% of that goes into savings. As they get older, and want to buy things like Christmas gifts, on their own, it comes out of their money. Anything they get from birthdays, Christmas, or babysitting, they get to keep as pocket money. Once they start working, usually restaurants, we require 100% of their paychecks, and 50% of tips go into savings. That adjusts to 60% in savings once they start driving, and have to pay for a car. The more pocket money they have, the more we expect they pay for on their own.
Great thread folks!
I've got 2 kids and my oldest is in 1st grade. I've been thinking about the allowance thing for a couple months now, since my kid has started saying "i want to buy that" lately. I like the $1/grade/week, but that doesn't seem like very much, but on the other hand $1/age/week seems like too much!
Maybe I'll try $.50/age/week...
I'm very committed to "teaching/making" them save. I didn't really get that lesson as a child.
Thanks for all the thoughts everyone...I was listening to a podcast recently (I cannot remember which one) and the lady had a description of allowance that really struck me. In her family they did not give any money for anything other than what you would normally pay someone else, i.e. mowing the lawn, deep cleaning the house, etc. The thought was that kids should have an understanding that normal household tasks, i.e. putting cloths away, making your bed, etc. are all part of normal family life and everyone has to participate in helping the household. This seems to resonate with me. I was giving an allowance when I was young and it was loosely associated with ordinary chores and I think I could have learned a bit more about what it means to make a household run. Now that I have three kids of my own (all under 4, so allowance is not the case yet) I am rather convinced that the normal household needs should be shared by all (age appropriate), and our kids do help "fold" towels.
All of that being said I also think that something can be said for the whole school as a job thing. I am a little hesitant about this but I am not entirely sure why?...Maybe it is because I hope to be homeschooling or paying for my children's education if we live in place that has decent private schools.
My so gets allowance because he is in school. The younger two do not yet. He gets 7 a month because he is 7. It looks like lots of kids get more. He can spend on anything he wants, usually hot wheels, but for every full $10 left in his category at the end of the month he earns a dollar of interest, so usually he gets more than $7. I do usually restrict buying candy and junk food but not always.
He doesn’t get money for chores. You do chores because you live here. He doesn’t get money for grades because doing our best is a family value that is just expected.
When our kids are in middle school they will get bank accounts and enough money to buy their own clothes, school lunches, school supplies, sport gear, gifts for family, basically everything. My mom did this when I was young and it is a great way to learn to manage your money and an actual account before being a real adult. I got $100 a month starting in 6th grade which is not a ton when you need to buy all of that discretionary stuff on your own. I definitely made some mistakes like buying a $60 Roxy hoodie and then not having enough money to buy school lunch. Now that we have ynab I’m looking forward to helping them plan ahead and budget their own accounts when they’re old enough.
My girls are 7 and 9. I just stared to give them an allowance a few weeks ago, just a little after I started YNAB, I am doing it to teach them to be responsible with money. They each have their own budget in YNAB and I have a category in my budget for their allowance money (the money stays in my checking account until they buy something with the money. They each get $5 every two weeks when I get paid. It was really all we can afford to give them right now. They have categories in their budget to decide what they want to do. I make them put $1 of the $5 into long term savings and .50 into giving. The rest they get to decide which category they want to save for.
We took a allowances in a slightly different direction and modeled on what my parents did with me, only I was 13 when they started it.
When my son was eight we set up an envelope system and gave him his weekly allowance, BUT there was an envelope for something he had to have that was no fun to buy. (Not all money is discretionary money!) I think we started with shoes, but maybe it was glasses. I knew how much they cost and how often he had to get them, divided it out by 12 and gave him that much extra for his envelopes of saving, giving, spending, shoes.
He did great, and over time we added other non-discretionary spending that we had been covering. Clothes, glasses, club dues, etc. He hated sports, but we would have added it if needed. When he was 11 he came to me and said one of his friends went through his drawer and found his money and it was time to put it somewhere safe. So, presto, he had a credit union account with several hundred dollars, a picture ID, and he was buying everything he needed. He knew how to reconcile the account and how to shift money depending on his needs, which he didn't do very often. (Shoes was an interesting category when he hit puberty! Who knew feet could grow so fast.) It was interesting to watch him make shopping decisions compared to his peers--no expensive shoes for him!
We spent the same on on allowance as we would have if his costs were coming out of our budget anyway, but the responsibility was shifted to him. He was a bright, cooperative kid so it was easy to hand him the reins. The thing is, you have to be willing to let them stumble and not bail them out. Help them figure it out, but not hand them money. No money for shoes? I guess your old ones will work, or you could take from spending money.
He left home with budgeting skills, and money in the bank. He's in his thirties and has never had credit card debt, not even in college.
He did have a big purchase he had been saving for when he was about 11. We loaned him the money and he was so happy with what he got. But then, every time he came into some extra money, he had to hand it over to pay off his debt. He said, "It isn't so much fun to pay for something after you already have it. Next time I'll just wait and save first."
We give 50 cents a week per year of age, so the 10 year old gets $5 and the 8 year old gets $4. At their age, that is plenty of money for spending on wants. They both have YNAB budgets so they can learn to budget their money and WAM for tradeoffs. And yes, it does include tzedakah, which is something they learn about in religious school. We have them save it and hand it over to us to write a check so our family can save on taxes.
As they get into high school, the amount of allowance will increase significantly (probably in the $2-3/week/year of age range... I haven't worked out the exact math yet) as we shift more responsibility for expenses to them to prepare them for moving out of the house. That is something my parents did with me. I was responsbile for all my expenses outside of food/clothing/shelter and use of the family cars. My dad the CPA gave me an accounting ledger to manage my budget... my kids will be able to use YNAB instead.
I started with a doller per age, like many did. I started once the child turns 4. We use the Money Savvy piggy banks with 4 slots for spending/saving/giving/investing. We do add interest, like many others do as well.
My long term plan is to do exactly what Relieved did. I think we're going to start with school supplies. I think we'll begin as soon as the children learn how to carry numbers when adding.
Edited to clarify name of piggy bank.
Have only started pocket money for the girls a month ago. We have a holiday planned and would like them to have spending money of their own.
They help out around the house as they are part of the family and now that I am working more hours, I appreciate any extra help I can get (even a poorly vaccumed floor 😉 ). When they complain, I explain that they benefit from me working more. If we are at the bookstore they nearly always get a book, when the Sims gets an update, I would get it for them.
Trying to find that balance between "this happens as you are part of the family" and also learning about earning with managing money.
My father wanted to give us kids a dollar for every A on our report cards. We got letter grades starting in seventh grade so roughly ages 12-18.
My mother thought that "paying for grades" was a terrible idea.
For me, the reality was that twice each year I received a token infusion of cash sufficient to pay for one ticket to the movie and some pizza or a hamburger.
The money was no incentive at all.
I didn't think about it except when I handed over my report card and received a little cash.
I didn't pay attention to my siblings grades.
Note: we also received small weekly allowances that were not tied to anything. There was no compulsory saving or charitable giving. I saved anyway, graduating to a passbook savings account at the local bank when I was in middle school (age 10?)
We kids could earn more by doing chores above and beyond what was required of us indoors and outdoors as members of a household. My mother priced out the jobs and posted a list.
Eventually we got paying jobs outside our parents' sphere. By then we had learned how to work.
I have a 6 and 8 year old. I don't give them money every week just for being alive, damn I wish someone did that for me, and I'm not a believer that teaching kids that $ just for living is a good lesson b/c that's not real life. They have a list of weekly responsibilities that they have to do - and each thing is worth both $ and stars. For instance, 'clean room' is one of the items, and it's worth $.25 - EVERY DAY. But emptying the trash cans is worth $.50 and that's only once a week. On slow weeks, they tend to earn around $1.50 or $2 if they don't stay on top of their responsibilities. But they could earn as much as $8 in a week. If they don't do any responsibilities, they get no money. I tell them THEY have to buy what they want, and "for now" I will buy them what they need, but that will change as they get older, and it also changes if they're disrespectful of their things (for instance my daughter just bought herself a new pair of shoes b/c she lost 2 pairs in 1 month!). So I never have the Target issue - they bring a little wallet with them and look in there to see if they can afford what they want. If they can't afford it, they don't get it. It's that simple. I'm about to layer in savings, but haven't done that yet. They've started a lemonade stand recently - they pooled their $ to buy the ingredients, then ate most of the ingredients and realized that was a bust. But then they did it again, and earned $50! They were astounded that most weeks they get $4 and this week they got $50 - so trying to teach them the power of investing and entrepreneurship too. Don't give kids money for nothing. Learning the power of your own two hands to earn a living is another way to build self-confidence and independence. And they feel that much more pride in what they bought. You know that gift you bought with your aunt's $20? You can't remember it, can you? But I bet you can remember something you worked really hard to get... they'll care for their things more when they've worked hard and saved long to get it.
What age did you start giving your kids an allowance? -probably around age 10
How much and how often? $10/week, but only if they do their assigned chores, on time and up to my level of expectation. If they do a poor job or don't do their chores, they still have to do their chores, but they get no payment for the week.
Do you force them to practice saving and/or giving? Yes, I force them to keep 10% in savings for emergencies, and I encourage them to drop a dollar per week into the basket at church (which can come out of the 10%), but that is optional. Its of no value if their hearts are not in it. But they see me give every week and they are often eager to emulate.
Do you allow them to buy whatever they want with their money, even if it is ridiculous? with the remaining 90%, yes, they can do what they want, its their money.