Friday, July 9, 2010

Allowance


I've always been a bit stumped by how to best give an allowance to the children. I feel strongly that they should contribute to the household simply because they are a part of the household and not just because I am paying them. On the other hand I believe that giving them an allowance is a great learning opportunity for them. It seems that a lot of our perceptions and how we manage money is set up in childhood. Up until now the children have not needed or asked for money nor have they really understood it. In fact, until recently Harris would take money out of his piggy bank to play with it as a pirate!

Grace began asking how she could earn some money a few months ago. She doesn't have any lofty goals of buying something fancy but I believe that she likes the idea of being able to purchase something (in the dollar isle at Target) with her own money. I recently read about the book Three Cups by Mark St. Germain. Its purpose is to teach children how to save, spend and be charitable with money. It outlines (through story form) how to set up a system of dividing your allowance into these three areas- week after week.

We've been using this system for several weeks now and it is going really well. We only give the children $2 per week and they lose 10 cents every time they lose a ball (have I talked about our ping pong ball system?) so the allowance can be anything from $0 to $2. I've told the children that as soon as their saving jar gets to $10 I will take them to the bank to set up a savings account. I'm hoping that this system will prove to have longevity and will prove successful in the short and long term.

Does anyone have a great method for giving an allowance? Is $2 overly generous or too miserly?

5 comments:

  1. We've been working on changing the way our family works together using guidance from a program called Parenting on Track. One aspect has been giving allowance on a weekly basis at family meeting. Each child gets the amount of money of her age and there are NO strings attached. Only thing is you have to come to family meeting to get your allowance. When the money goes across the table, we then shut our mouths about where it goes, where it's stored, how it's spent (even if it kills us, which it does!). But any time we're at a store and the kids want something, I say "Yes, did you bring your money?" The perfect way for kids to learn on their own (while the stakes are low) that money needs to be kept somewhere safe, needs to come with you, decisions have to be made about how to best spend it. Then you can integrate it with the spend, save, give idea to help them learn. But in the end, for the money management idea, you let them make the decisions and mistakes. This has been a FABULOUS experiment with the kids. They are learning so much. My money-burning-a-hole-in-pocket son has decided to save $100 (just for the heck of it) and he's really exercising self control (which I know is so hard for him when it comes to spending money) and is so proud of himself because he's at about $70 (he's 7). Oh, and the Parenting on Track guru says that if you find money lying around the house, you just quietly tuck it into a family vacation fund. My 3 year old often walks away from mtg and leaves her money on the table. But eventually, she has started to learn the power of money when she actually wants to buy something.

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  2. Couldn't agree more with your arrangement. Kudos!

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  3. This is a great idea...my daughter is only 2.5 s owe are not quite there yet, but I am definitely going to file this away for the future. Thanks for sharing! (love Dawn's ideas too! what a great way to teach about money)

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  4. Okay, I was just doing some blog hopping and happened upon myself here. Would it sound overly dramatic if I said that I'm in love with your blog? This space is so positive, with so many wonderful ideas. I'm taken! New follower here. Thanks!

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  5. If the physical jars run out of steam and you're looking for an intermediate step between them and real world bank accounts, you might be interested in our Virtual Family Bank at FamZoo.com

    Cheers,
    Bill

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