Allowances

I have been asked several times about how we do allowances. I thought I would share my response on the blog since many have asked. This is what we are currently doing. We are constantly tweaking every process that we do, so it could change. I would love to hear ideas from you about how you handle this area in your families.

We decided at the beginning that allowance was an opportunity for us to teach our kids how to handle money while they are young before they make BIG money mistakes. So, we see their allowance as an investment in training them to budget, tithe, and spend. They start getting allowance at age 4. Age 4 is a milestone bday in our house where they move from toddler to big kid. So, they get $1.00 a week(nothing major, but a start). Then, when they start Kindergarten, they get a raise to $2.00 a week. When they turn 10, they get a raise to $3.00 a week, and we have decided at 12 they will most likely go to $5.00 a week(Cody will be 12 in August so we were just discussing this.)

Here is our philosophy. Your allowance is not based on your work. You get it as a member of our family. You have certain responsibilities as a member of our family as well, like cleaning your room, putting your things away, and the division of chores that vary according to days of the week(that is a whole other system that I can tell you about if you are interested in it), and going to school. If a child wants to earn extra money(I will pay certain amounts for certain chores that help me) they have to first do their regular chores. If those are completed, they can then do chores for extra money. (I am talking 50 cents for this or $1.00 for that, nothing big.)

If they want something, they can save up their own money. The reason it increases is because as they get older, they have opportunities to participate in activities that cost money like tween night at the YMCA. Right now, we pay half, they pay half for those types of activities. We don't really limit their spending too much because we want them to learn by making poor choices and wise choices. When they make a poor choice and waste their money, they often miss out on something else. Hopefully, lesson learned. We do teach them to tithe their money as well.

The older kids keep up with their own money. I have a bank for Sam's money that I keep for him in the kitchen. I think it just depends on how responsible they are. Cody has always been able to keep up with his own because he is just that kind of kid. Lauren loses hers half of the time. The only saving we have done with them is when they want to save up for something specific.