Allowance - Pottstown, PA

Hi B.,
I haven't gotten to this point yet, but my husband and I have put some thought into it. We've decided that our children will have 3 banks, one for saving, one for spending and one for charity. That way they learn the good habits of saving for something they want and to help others not as fortunate as we are. As for allowances...this may sound harsh but we figure that we "allow" them to live with us and we will supply them w/ what they want when we can. We want them to understand the importance of saving up for special things they want and hopefully to NOT develop that sense of entitlement that we see in way too many children these days. Good luck, T.

Hi B., I use basically the same system as Amy. My daughter is 8 and has 3 banks. One is for saving, one is for spending and the other is for "special" items. When her savings bank is full, we take the money to Commerce Bank, where she has an account. Her spending bank is for our once a week trip to walmart (or the ice cream man/candy store) and her "special" bank is for something big that she wants to buy or wants to do. For example, her "special" bank was used most recently for her cell phone. She asked for it for her birthday, so my husband and I got her one on the condition that she pay half of the bill. She's had her phone for 5 months now and hasn't missed one payment. I should mention that she gets $10 a week for chores and healthy habits. Out of this she made the decision to put $3 in savings, $3 in spending and $4 in her "special" bank. I understand that having 3 kids to give an allowance to is not so easy (I thank god my son is only 2), but maybe should should try adding 50 cents a day for anything extra that they do (garbage, vacuum, dishes). This way they will feel they have more money to divide between savings and spending and you get a little help aroundthe house. Good luck to you.

Hi, I don't know if you are a Christian or not, but the Christian bookstores have a great bank that breaks down a childs allowance by tithe, saving, and spending. It is a great tool. Even if you are not a Christian, you could still use the bank and use the tithe slot for your short term savings or something else. Also, have them get a picture of something they really want but costs a lot and glue it to an bank or envelope. Each time they get their allowance, have them decide how much they want to put away for their item.
Just some thoughts.

Hi B.-
We have 2 kids, 10 and 6 years old. This is the way we do it: they have "family chores" like cleaning their room, picking up their dirty laundry and making their bed. For "family chores" they don't get paid, they do it because they are in our family and we all have to do certain things just because. Then we have "money chores" like dusting, putting away their clean clothes, taking out the bathroom and bedroom trashes and even vacuuming for my oldest. The youngest does a Swiffer on the hardwood floors. For doing all of this they get $5 a week and this is how they are to break it up: $1 goes into the "savings bucket", $1 goes into the "church tithe bucket" and the other $3 goes into the "fun money" bucket. I went and bought little tupperware bowls with lids and we decorated them for each thing:savings, church and fun money. It works really well with our kids and it doesn't matter how old they are, they can do some kind of chore. It teaches them about being a part of a family, and it also teaches them about saving and tithing. Hope this helps.
K. B

Check out this website for guidelines: www.DaveRamsey.com There's a special section just for kids and parents. I hope it helps. Let me know how it goes!

Some of this I don�t agree with 100%, but the premise is pretty clear. The only thing that I don�t agree with is that if my son was needing lunch for school, I would have probably made it for him, and deducted $2 out of his allowance the following week. My older sister used this technique with my niece and nephew, and it worked. Whatever their allowance was, if they forgot their purse/wallet, then they could not buy anything. And they never complained; they just remembered next time bring their allowance, and from then on they never forgot. Also, they never bugged my sister for money because they knew that once their allowance was gone, that was it.

The best suggestion is $1 per age. If they are 8 years old, $8 a week, etc.

Pearl 1
Allowances and Money

There comes a time in the life of every child when financial responsibility pokes its foreboding snout through the tent flap of his or her world. We call it an allowance. It usually begins when a child is five or six years old.
We give children allowances because we want to teach them money management. Kids who have to struggle with money not only become more fiscally responsible, they also become more responsible in all areas of life. In fact, it has been found that kids with good money-management skills tend to manage their jobs at school better, too.
Several helpful rules on allowances will help our kids make the most of this terrific learning experience.
Rule 1: Children do not earn their allowances. That means we do not pay them to do their chores. Being paid for chores robs them of the dignity of holding up their fair share of the family workload. The only time we�d pay them for chores is when they do our chores, that is, if we don�t want to do them.
Rule 2: Provide the allowance at the same time every week. This can be done with pay envelopes. Place the cash, plus a small invoice indicating the breakdown of the funds � for example, for a child in first grade, �$1 allowance, $6 lunch money� � inside an envelope with the child�s name on it. Sign the invoice, �Because we love you. Spend it wisely and make it last.� The child must then tend to the envelope.
Rule 3: Never insist that children save their allowance. They can�t learn to handle money if they stash their allowance in a shoe box at the back of their closet, saving it for when they get big. Kids must go through their own economic depression � wasting money, then not having any when they need it � to learn about money. In general, people � and kids, too � learn best to save only after they�ve learned how to be broke.
Rule 4: As long as they�re not engaged in illegal activity, allow children to spend, save, or waste the money any way they see fit. They can use it to hire others to do their chores. They can even hire a baby-sitter if they don�t want to go somewhere with the family.
But there�s a catch: When it�s gone, it�s gone. No more allowance until the next week�s envelope.
My (Jim�s) son Charlie learned a powerful lesson in money management the very first week he got on the allowance payroll. Our family visited a carnival, and the mid-way barkers had their way with the boy. He came home flat broke.
�Dad, what am I going to do for lunch?� Charlie said when reality struck him on Monday morning.
�Go over to your pay envelope and get your lunch money out,� I replied.
�But it�s all gone,� Charlie said.
�Oh, no, that�s really too bad. What are you going to do?� I said.
�I don�t know,� Charlie said. �Can I get some food out of the refrigerator and make a lunch?�
�Sure, if you can afford to pay for it,� I said. �Mom and I have already paid for lunches once, and we don�t want to pay for them again.�
It was a tough week for Charlie. But surviving for five days on two meals a day (we made sure they were good ones) taught him a big lesson in money management.
There will be times, however, when kids are more persistent � and more psychology devious � than Charlie. When they blow their bankroll early and shuffle up to us begging for more money before the appointed allowance time, we must become as tight as a Depression-era banker. There will be more money, sure � on allowance day. Even when our kids push the powerful guilt button, we must make sure nothing moves out of our pockets.
Observe how this dad handles daughter Steffi�s mid-week crisis.

STEFFI: �Dad, I need more allowance.�
DAD: �Yeah, that�s kind of how it is for me. I always need more money in my paycheck than I get. Have you got any ideas about what you�re going to do?�
STEFFI: �Yeah. I�m asking you. Dad, could you give me more allowance?�
DAD: �Well, I�ll be happy to give you your allowance on Saturday. But for now, maybe you�ll consider bidding on someone else�s chores around the house so you can earn more money that way.�
STEFFI: �But I need it now!�
DAD: �Boy, I bet you do. But don�t worry; you�ll get more on Saturday.�
STEFFI: �That�s not fair!�
DAD: �That could be true, and there will be more on Saturday.�
STEFFI: My friends don�t have this problem because their parents love them and give them more money.�
DAD: �I bet that�s true too, and there will be more on Saturday.

If Steffi keeps it up, Dad could put a finishing touch to the discussion by saying, �If I kept carrying on like that to my boss, how d you suppose he�d feel about my job? He�d feel like paying me less, wouldn�t he? So, do your best to solve this, Steffi. We�ll see you later."

Source: Parenting with Love and Logic by Foster Cline, MD, and Jim Fay (www.loveandlogic.com)

Hi B.,

I am not at that point with my kids yet, but I do have a suggestion. I saw a bank in walmart that looks just like an ATM machine. You put the money in, adn it digitally remembers how much you have in there. you can "withdraw" the money when you want. I thought it was a cool idea. that might be a way to do it.

When my 18 year old nephiew moved in with me a year ago, I would take his paychecks. he didn't have a bank account yet, and he needed to get id before he could open one. I would put 80% in the bank for him, and he would be allowed to keep 20% for his own use. You may want to try that with their allowence. That way, 80% is being saved for long term, and they can learn to save up the 20% for something they want.

HI, I MYSELF WAS GOING THROUGH A ROUGH TIME ABOUT 8 MOS AGO WHERE MY KIDS HAD GOTTEN INTO THE HABIT OF CONSTANTLY ASKING ME TO BUY THEM THINGS AND BEING DEFIANT WHEN I SAID NO. I DECIDED TO MAKE SOME DECISIONS THEN AND THERE SEEING AS HOW I WAS GOING THROUGH THIS. I TOOK THEIR PIGGY BANKS THAT THEY BOTH HAD HALF FULL AND SPENT AN HOUR OR SO ROLLING THE COINS AND MADE THEM HELP RIGHT ALONG SIDE, WHEN WE WERE DONE WE WENT TO THE BANK, I USE BELCO COMMUNITY CREDIT UNION AND OPENED THEM A SAFARI KIDS CLUB ACCOUNT, MY YOUNGER SON WHO IS 3 JUST GOT A SAVINGS BUT WITH A MAC CARD AND MY OLDER SON WHO IS 9 GOT A CHECKING ACCOUNT WITH CHECKS AND A MAC CARD. NOW WHEN THEY EARN THEIR ALLOWANCE WE MAKE A SPECIAL TRIP TO THE BANK TO PUT THEIR MONEY IN AND WHEN THEY WANT SOMETHING I PULL OUT THEIR BOOKS AND SHOW THEM THE PART OF THE MONEY THEY ARE ALLOWED TO SPEND AND HOW MUCH IT WOULD LEAVE THEM AND ALMOST EVERY TIME THEY DON'T WANT IT....THEY NEVER ASK FOR ANYTHING NOW..GOOD LUCK, PASS WHAT YOU FIND ALONG CAUSE I'M ALWAYS LOOKING FOR ANYTHING THAT COULD BE BETTER.....

I let him save his $$ in the piggy bank, then every 2-3 months I help him count it and I let him keep 20% of it and have him save the 80%. He has an account so I take him personally and he deposits it. In addition, we sometimes make deposits of our own and I tell him that it's due to him behaving, helping out with laundry and garbage. He's only 6 but loves seeing the money add up.

My son will be 8 in September. He has a list of chores that he is expected to do as part of the family. If he does extra jobs he gets "paid" for them. Different amounts depending on what it is. If he doesn't do something on his chore list he loses money. The way we keep track is for each credit or debit I or his father right it on a piece of paper and put it in a coffe can that we decorated. On Friday we take out the papers and add the totals. Then he gets half for spending, 1/4 for the bank and 1/4 for charity. For spending I bought a play check book at dollar tree and when he want something, if he has enough money in his book he rights me a check for it and I buy it for him. I did this to help him learn how to write checks and balanace a checkbook. This is one of the many life skills often not taught in school anymore.