I mentioned here that our third son turned seven on Sunday. Turning seven at our house is pretty exciting. Not only do you usually have two front teeth missing, it’s the year you start receiving an allowance.
I know that not everyone agrees that giving your kids an allowance is a good idea. But let me explain our reasons, and how we handle allowance at our house. Then later, in the comments, I would love for you to share how you handle it (or plan to handle it) with your kids.
Matt and I want to teach our kids how to handle money, how to budget, and how to give. Before the age of about 10, our kids don’t have very many ways to earn money.
On the first day of each month we give our seven and eight year old boys $4 each. Yeah, that’s it. Four bucks a month. I know parents who give five times that per WEEK. Again, this is just something we’re giving them to help them learn a little bit about money.
We decided to give them their allowance monthly because in the “real world” they are likely to only be paid monthly. They need to learn how to manage that.
With their four dollars per month, the boys mostly learn to give and save. They get to figure out (with our help of course) how much goes in the collection plate each Sunday. They get to help buy birthday presents for each other and for their friends. I love watching them pull their money out of their pockets on Sunday morning as the collection plate comes around, or watching them carry their wallet into Wal-mart so they can pick out a hot wheel car for their buddy. They feel ownership – it is their money.
We discourage them to spend their money very often on little toys for themselves when we go to the store. It has surprised us to see that for the most part, the boys hardly ever ask to spend any of their money on a toy or trinket. Occasionally at a garage sale they’ll see something they want. Or sometimes they’ll save up to get something (often pooling their money together to get something they all want). But in general, the money in their wallet just grows.
Now that Asa, our oldest son, is 11, we’ve stopped giving him an allowance. He has had various ways of earning money in the past year or so…and the four dollars a month just isn’t necessary. He has done a great job putting money into a savings account we helped him open last summer. He gives generously each Sunday, and any other time he hears of a mission need or special collection at church. He’s learning to give and save, and we feel like his little four dollar allowance when he was smaller helped him get on the right track. :)
So, now that we are on our third seven year old, we’re finding that this $4/month system really works for us as we’re training our boys.
What works for you? Do you give your kids an allowance? How do you teach your kids at an early age to manage money (or how were you taught)?