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Do your kids get pocket-money?

By October 22, 2008 - 1:58pm
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Our two children of pre-school age now get a 'paycheck' every Friday. Too soon? I don't think so, personally.

We call it a 'paycheck' because it is earned. They have to tidy their rooms daily and they have to put away their toys downstairs every evening. They also help to take laundry upstairs and one turns on the vacuum cleaner, the other turns it off (I know, that one is weird, but that's their way!)

They get $2 a week that they may save permanently, save half or spend on a toy or occasional cookie treat when out. We allow them to pay at the cashier desk to get a feel of how money works. We also deduct their paycheck if their chores are not done due to laziness or just not wanting to. Forgetfulness is allowed - they are young!

Anyone else introduce 'paychecks' this early, even before Kindergarten? Our children now have at least some idea how money works and the responsibility attached and look forward to Fridays and their paychecks just like anyone else. It's actually really cute to see them get their $2 every week and know they really earned it.

Do you give an allowance regardless of chores or is the money earned? How much do you hand over? How do your kids handle the money?

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EmpowHER Guest

As a grandmother i thought i would share the system i used with my 2 children. From the age of aobut 6 and 8 we had an allowance - not dependent on chores. We entered into an agreement aobut this , the allowance was divided into 4 parts (not necessarily equal), and they had some financial goals that we agreed to together. the parts were:
1> immediate spending - "play money" to be used completely as they wanted with no control from me - lollies, cheap toys, presents, whatever
2> short term savings - they set a goal of something a bit larger that required saving for - perhaps a trip to the movies, a new barbie doll, something which would take anything from 1 - 3 months to save the money for (often by the time the goal amount was achieved they had decided to spend it on something different - but that was alloable)
3> long term savings - this would take up to a year to work towards, and probably needed to be subsidised by matching cntributions from Mum or income earnt from extra chores, part time jobs etc(my 7yr old daughter made and sold chocolate cakes to raise money for a bike). goals such as new bikes, play stations, etc were in this category
4> family savings. We all contributed to this fund - I matched (or bettered) their contributions. we set a goal together - equal say from all parties - for a family activity or goal and saved towards this. One year they saved so on our family camping holiday we could go on an expensive "tourist" type day cruise, other times trips to the Zoo, night out at a "nice restaurant", or other such activities were agreed upon. Note this activity was mainly chosen by the children - not the adult.

this system worked well, they moaned about it, but grew up with an understanding of the value oF money, and of the need to save for the good things in life

February 11, 2009 - 7:18pm

Thought this would be of interest to you:

About Allowances

Source: GiveMe20.com

October 24, 2008 - 9:14am

Although there is merit to the thirds idea, I personally don't think it's fair to the child to pay "taxes" back to the household, nor do I think it's fair for the adolescent child to pay rent. These costs are the responsibility of the parent to the child, in my opinion. Once the child is out on his/her own, rent and taxes become their own responsibility.

I do not consider allowances "wages." The kids should learn that wages are earned as a result of doing a job. Let the kid mow someone's lawn when he's old enough, or babysit, or walk dogs, whatever.

An allowance should be to teach the child how to respect and manage money, and, because money makes our world go around, the joy of having your own money to spend on the things you want. I suppose that, because I come from an investment banking background, I look at things much differently than other parents. My kids learned about investing; more kids should. A lot of adults I know never did!

Just curious: do you give yourself an allowance?

And, about "household citizenry," while "expected," children will also learn there is a reward for good behavior and attitudes. Isn't that what happens in real life?

October 23, 2008 - 4:16pm

This has been interesting, as I have an almost-2 year old, and will be faced with this decision in the next few years.

As of right now, I don't think I would give my son an allowance for doing chores or being a good household citizen, as these would be expected of him already, and I want him to know that he doesn't get paid for simply meeting minimum requirements of living with others. I've thought that I would let him earn a paycheck/allowance by doing extra chores not typically expected, up to a certain dollar amount. Not sure what age this will occur.

I would also like to set up the system of "thirds" as Diane pointed out, but in a different way (although, I hadn't thought of the "tax" idea yet...brilliant!). I had thought: 1/3 savings, 1/3 spend and 1/3 charity would be a good way for him to learn about helping others; and when he is older, he can choose to use that "1/3 for charity" with either volunteering his time or giving his money. I don't want to set up us for failure, though, as my husband and I do not give 1/3 of every paycheck to charity (although that is the ultimate goal), and would not want to expect something of our son that we can not do ourselves. (The "role model" thing gets in the way of raising kids sometimes, ha ha).

October 23, 2008 - 12:51pm

I never got an allowance, I believe, until I was 10 or 12, and I think that was too late. By that time, I was old enough that I just saw it as "bonus money," not tied to specific chores (because I already did them) and not much interested in saving, because there were already too many things in the stores I was interested in. I think it's probably smart to start an allowance -- and the money learning that goes with it -- at least before "tween" age, when every advertisement and every friend has some new thing that a little kid yearns for.

My sister started her kids' allowances at 6. They actually give an allowance equal to each child's age, but with this caveat: 1/3 goes to savings, 1/3 goes to "taxes," and 1/3 is the child's to spend as they wish. So in essence, the 6-year-old has $2 to spend, puts $2 in savings and donates his $2 "tax" money to the household -- in the kids' case, they understand that taxes go to pay for lightbulbs, phones, cable tv, etc.

It'll be interesting to see, once these little kids are older and out in the world, what effect this routine has had on them. (They already grumble about taxes, LOL, but they also will never expect a paycheck without deductions!)

October 23, 2008 - 8:13am

Wow, $2 a week is a lot for a pre-schooler. I suppose that's accounting for the rate of inflation from when my kids were that age (they each got $1/week). Our rule was that the allowance was NOT for chores (picking up their clothes, putting toys away) because those were expected tasks. The allowance was a reward for being a responsible household citizen (respecting each other and adults) and keeping up with their school work (okay, bribery).

Having spent nearly 20 years in high finance, it was important to teach my kids the value of money. My daughter saved her money, while the boys were always eager to spend theirs. Funny how that works. But, they also learned how to shop very well in order to "stretch" their buying power.

October 22, 2008 - 4:39pm
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