Teaching kids about money is a continual battle. To help distinguish between “needs” and “wants,” I set up an allowance for all three of my kids. I have been using the following system for almost two years now with great success.
I bought a huge box of cheap envelopes. Every three months or so, I go to the bank and get the money needed in one, five, ten, and twenty dollar bills. Each month has one envelope with the Sunday dates listed, the amount paid weekly, and the total amount due. They each have a small drawer in the kitchen dedicated to their allowance envelopes.
Sarah’s August Allowance—
$5/week * 5 Sundays =$25
Inside this envelope would be a $20 bill and a $5. I try to use the larger bills if possible. It makes you think twice to buy $0.75 M&Ms if you have to pay with a $20.
I have three kids, ages eight, eleven, and thirteen, and they each have an allowance drawer in the kitchen. This morning, I paid all of their allowances through December. They are allowed to borrow their own money, but they are only supposed to borrow in the current month. They use their allowance for snacks at school, or the concession stand at sports. I very rarely will lend them a dollar or two, but I expect to be paid the minute we get home.
Allowance is wonderful for being able to say yes to the many small purchase requests.
“Can I buy gum at the grocery store checkout?” I reply, “YES! Did you bring your allowance?”
“May I get a gatorade at the concession stand?” I answer, “You betcha! You have your allowance with you, right?”
Paying three months worth of allowance at once has been the key for me. I would never have the money on hand to do this weekly, and even monthly I would fall far beyond, and end up not keeping up to date. This is not tied to any work around the house; it is expected that you help out when needed. As the money is really meant for small indulgences, the amounts are relatively small—the thirteen-year-old gets $5/week, the eleven-year-old gets $3/week, and the eight-year-old gets $2.50/week. My eleven-year-old is probably due for a raise, but he doesn’t spend much, so he really doesn’t need more money. My eight-year-old blows through her money quickly, but it is hers to spend.
I have not quite found the chore routine that works well for our family. I generally can find an interesting way to assign chores, but the novelty wears off in a few weeks. Suggestions for chores are welcome! However, I would like to find a chore idea that someone has actually used for more than six months.