My five-year-old daughter can identify all the coins, and she’s learning how much they’re worth. My seven-year-old can estimate tax, then pay for something and know exactly how much change he should get, down to the penny. They’re both learning addition, subtraction, fractions, and percentages.
They haven’t learned all this at school or in advanced math tutoring sessions. They’re not geniuses (well, they might be — but I’m biased). They get an allowance. And they learned all those skills sitting around our kitchen table every Sunday while my husband and I distribute their money.
When we decided to give our kids allowance, our main goal was to teach them responsible money management. They each started getting allowance at age five, when we felt they were old enough to begin to understand the responsibility. We wanted them to learn that you can’t spend more than you have. We wanted them to understand that toys don’t just magically appear in our home (unless the grandparents are on a shopping kick) and that sometimes we have to save up to get the things we want.
But in our house, allowance is about more than just being responsible with money. We wanted our kids to save money (for college or other future endeavors). We wanted to teach them what charity is and why we should give to others. We wanted them to practice speaking to and interacting with other adults. This last point means we limit their online shopping, so they have to interact with a cashier while physically counting out their money. Sometimes this is the toughest part for my little introverts.
So how do we do all this? Each kid has three jars. The first is their “spend” jar, where they are allowed to put 80 percent of the allowance money, and spend it on anything they want (typically the first thing they see in the dollar bins at Target). The next jar is labeled “save,” and in it goes 10 percent. This money gets deposited into his or her very own savings account once a year, and the kids know that it’s for college. The last jar is “give,” and it also gets 10 percent. This money goes to a charity of his or her own choosing once a year. Last year, my son gave his money to Children’s Mercy after a child in my daughter’s class was diagnosed with leukemia.
Do they sometimes make terrible choices with their money? Of course. Many of their once-loved
impulse buys treasures now reside in the bottom of the toy bin. (My daughter didn’t need that fourth mermaid after all, I guess.) We encourage them to save up for the things they really want, but so far, the money burns holes in their pockets. You’d think they were huge bargain hunters, the way they search the aisles to find something they can afford.
Sometimes, though, my kids buy awesome things. My son purchased a Charizard Pokemon plush almost two years ago that he still absolutely loves. My daughter has purchased several baby dolls and doll accessories that she plays with frequently. The kids combined their money and bought a bunch of Perler bead pegboards and extra beads (additions to a hobby they were already into) and spent hours together creating new designs.
One of the biggest benefits of giving my kids allowance is that I don’t have to say no to their impulse-buy requests. When they get the gimmes, I just ask them if they have enough money. The decision gets put back on them, and I love that. It’s like a guilt-free way of saying “absolutely not” when I know they can’t afford something. The best part of this arrangement is that they hardly ever ask for things, since they already know what the answer is going to be.
It may not be a perfect system, but giving my kids an allowance is working pretty well in our family. To me, the benefits far outweigh the downside of having all those junky toys lying around.
Do you give your kids allowance?