What kind of "allowance" do your kids get and how is it working for you?

[bisous]

Despite best laid plans, I have yet to institute a regular allowance policy with my kids. But that is going to change. Initially I favored not tying allowance to chores but I think I've changed my opinion. It was largely influenced by listening a program on NPR. I'm trying to FIND that program again because it was fascinating but I heard it at 2:00 in the morning back in July and I can't even remember the name of the program let alone find the specific content. It was something like BBC Parenting?? Anyway. There was a study that a panel discussed that talked about allowance strategies and subsequent understanding and appreciation for money. According to the study, far and away the kids that appreciated money the least were the ones who received an allowance not tied to chores for purposes of money management. Kids who did not receive an allowance but whose parents gave them money when they needed it and kids who had allowances tied to chores appreciated money approximately equally! I'd love to find that study again.

Anyway, I'm about to announce plans to my kids that we're going to institute allowances with them. I'm excited about it, but I want to get real life feedback about what is working and what isn't. I really want my kids to save. In an era where our family is cutting back financially in a lot of areas I feel okay about "investing" in allowance in part because I'm hoping that they'll learn to save for things in the future, like college or missions (our family is Mormon). What strategies do you have for encouraging savings? My kids are totally the kind of kids that pool their money, head to target and spend every penny if given the option. I would honestly say that our family as a whole, while frugal, are not the best money managers. I'm hoping I can get better at this and I'd definitely like to give them a really solid foundation.

TIA!

[lalasmama]

For DD (13), she receives $20/mo, not tired to chores. I work, DH works, her job is school. We get paid for working, so she gets allowance for going to "work" (school). We continue it through summer, since DH gets paid over the summer too (he's a teacher). DH and I don't get paid for cleaning the house, taking out the garbage, etc., so neither does she. We do it so we don't have a gross, stinky, ugly home.

So, $20/mo.

She's a good saver, especially when motivated. Currently, she is saving $500 for a "solo" trip to Disneyland (not truly solo, but just me and her, with her having free reign to go without me inside the parks). That's half the cost of it for us to go. I think she's around $110 now, and says she will put half her allowance in that fund. I expected her to be a spender (like me), but when she sets a goal, she stays fairly on track! To be fair, she also sees DH and I take out $200 from our pay checks each month and put it in each of our "fun" budgets--so she sees us setting aside money for specific goals, and sees DH spending it at certain points (like a new sight for his rifle, etc). She knows I'm going for saving $1k for a trip, and that the only time I take out money from that savings is when it's immediately trip related (like buying my plane tickets).

We do have rules about what it can be spent on. No more than $5 on candy per month. Nothing that wouldn't be allowed at home (no YA books with racy parts, lol). Must give money to parent and clear it with parent before buying apps with money. Make up must be approved and appropriate. Like my parents did with us, if she wants something "outrageous" when we would buy something more modest (like $$$ jeans when we would do $25 jeans, some ridiculous $$$ shoes instead of Nike/UA), then she needs to use her money for the difference.

[bisous]

Thank you. So your DD is a saver just kind of naturally? That's so good to hear. $20 a month is kind of what I'm thinking for DS1 too. I can't afford your age in dollars per week around here! One thing DH and I never do is spend money on ourselves. We honestly will occasionally splurge but it is when we get some kind of extra money for a small job or something unanticipated. Maybe we should lead by example and see if we can carve out just a little for ourselves? Just for the sake of budgeting.

[squimp]

I don't think there is a magic answer about how to give allowance. I do think the important thing is to start early to share your perspectives about money, savings, and the value of how you spend your money. They should learn how to budget and that money does not grow on trees. They should see the value of work. They should have to save for things that they really want - like music, movies, rides at the fair, technology - as opposed to getting whatever they want when they want it. They should donate or volunteer to help people who are less fortunate.

I give DD $2/week, so $8 per month. She is almost 14 and this is probably too little, however, I have been doing this since she was 7.
The money goes straight into her bank account. It's not directly tied to chores but she is expected to do certain chores and other things as we ask. She also deposits birthday money and stuff like that in there. When she wants to buy things, we take money out of her account and give it to her. There is a chunk of change in that account! She is extremely frugal so far, not sure if that's nature or nurture thing. She also has a good sense of how much things cost and what is a good value. For example, she sees a shirt that is $30 and laughs thinking it is too expensive. Her favorite place to shop is the buy one get two free rack at Pac Sun. ;)

[icunurse]

The way we see it is that everything be in the family has expectations to make the home run smoothly. For the kids, we expect clean rooms, instrument practice done daily, homework and reading done daily, and good grades. They do not receive money for these basic expectations (just as I don't get paid for making dinner or grocery shopping). Then I took the Pinterest idea and wrote chores and monetary amounts on popsicle sticks and they can choose chores and how much money they earn each week. It includes things like pulling weeds, cleaning the litter box, making dinner, cleaning the bathroom, vacuuming, sweeping, etc. They work, they get paid. They exist, they don't. Some weeks they excel and make some decent money, other weeks they slack and get nothing. But the choice and power is theirs.

My younger isn't a great saver. Well, she saves and then spends it all to buy something. My older is finally starting to save and learn money value because we are making him pay for part of his big school trip next year. We typically don't let the kids have more than $20 at any time unless they are saving for something big (like the trip), they know $20 or more goes into their savings account.

[lalasmama]

Thank you. So your DD is a saver just kind of naturally? That's so good to hear. $20 a month is kind of what I'm thinking for DS1 too. I can't afford your age in dollars per week around here! One thing DH and I never do is spend money on ourselves. We honestly will occasionally splurge but it is when we get some kind of extra money for a small job or something unanticipated. Maybe we should lead by example and see if we can carve out just a little for ourselves? Just for the sake of budgeting.

Usually, we would just pull chunks of cash out for whatever we wanted to splurge on for ourselves. Well, you can guess what that looked like. A teacher and a medical office person don't bring in enough to do that like we were. So, the $100 for each of us works well. It's built right into the budget so it comes out just like our water or our TV or whatever. Has calmed our spending significantly, too!

[mmsmom]

I bookmarked this previous thread a few years ago:
http://windsorpeak.com/vbulletin/showthread.php?443499-How-Much-Allowance

[bisous]

I bookmarked this previous thread a few years ago:
http://windsorpeak.com/vbulletin/showthread.php?443499-How-Much-Allowance

Thank you. I remember this thread. This will have lots of ideas.

[bisous]

I bookmarked this previous thread a few years ago:
http://windsorpeak.com/vbulletin/showthread.php?443499-How-Much-Allowance


The way we see it is that everything be in the family has expectations to make the home run smoothly. For the kids, we expect clean rooms, instrument practice done daily, homework and reading done daily, and good grades. They do not receive money for these basic expectations (just as I don't get paid for making dinner or grocery shopping). Then I took the Pinterest idea and wrote chores and monetary amounts on popsicle sticks and they can choose chores and how much money they earn each week. It includes things like pulling weeds, cleaning the litter box, making dinner, cleaning the bathroom, vacuuming, sweeping, etc. They work, they get paid. They exist, they don't. Some weeks they excel and make some decent money, other weeks they slack and get nothing. But the choice and power is theirs.

My younger isn't a great saver. Well, she saves and then spends it all to buy something. My older is finally starting to save and learn money value because we are making him pay for part of his big school trip next year. We typically don't let the kids have more than $20 at any time unless they are saving for something big (like the trip), they know $20 or more goes into their savings account.

This system really appeals to me. Thank you. I really think this is what I'm inclined to do!

[gatorsmom]

None. My kids don't get money unless they get it as a birthday/Xmas present from a relative or if they tell me they want to work to make some money. If they ask me for a paying job, I tell them what the job is I have for them to do and we negotiate a fee. Their regular chores come first, though, and I don't pay for those. That's part of their responsibility to help keep our household running smoothly.

[hwin708]

We do the 3 bank system, dividing their money up into spend/save/donate. Starts typically sometime in their late 3s (mainly because they are starting to get monetary gifts from family) with 50cents per year. When they get older, it jumps at some point to $1 per year. The divisions is not precise, usually just split pretty evenly, or whichever way it is easiest to divide the money. So for age 3, 50cents in each bank. For age 4, 75cents in two banks, 50cents in the other. It takes a few years before they really understand the difference between the banks and start lobbying for the extra money in the spend jar. And usually we head into more complex financial management at that point, with the discussion of taking things like big checks from family members and putting it right into an interest earning savings account for college. This savings is separate from their regular savings bank.

We don't pay for basic chores. There is no option to not do basic chores, no "I'd rather get no money and do no cleaning this week." Anything they are expected to do daily/weekly, they need to do, as part of being a member of the household. No payment, just as we don't get paid for it. They do have the option to earn money for extras, though. I generally encourage this to be self-driven, i.e. they see a need, they fill the need. As opposed to me offering them money for tasks. Sometimes I do, though. Like when I decide all the mattresses need to be vacuumed and deep cleaned - not something I am putting the housekeeper on. And something I would enlist the kids to help me with if I wanted to do it. But instead, I may offer to pay a fee for them doing it, with no help from me.

But typically the "extra" options are things I am likely paying someone else to do, or didn't think to task out to someone else. The catch here is that it gets harder as they get older. A little kid might get paid for yard work, for example, despite not delivering great results. But if an older kid wants to get paid for mowing the lawn, s/he has to not only do a good job, they have to commit to it. I can't just fire and rehire the lawn guy every time my teen needs money.

The use of the banks kind of changes naturally with age. When they are little, their spend jar is up to them in terms of spending immediately or saving up for something better. They usually don't grasp the concept of spending, period. So saving it up for something better tends to happen just because it doesn't occur to them, when out and about, that they could just buy something. As they get older, they start to get more aware of wants and money, and this seems to be a personal choice. I don't really see a benefit to either method. The kid who spends immediately likes quick satisfaction from little things. The one who saves likes bigger, fancier toys. Whatever floats your boat.

The save jar isn't touched when they are little. When they get older, it becomes the option for a big "mistake." Car needs repairs - save jar. Dropped your school iPad - save jar. That kind of stuff. This is separate from their big bank savings account. My teen with a job has to split her paycheck between spend/donate/bank savings.

The donation jar is done yearly, at Christmas, with a lot of discussion before they donate to the charity of their choice. Regardless of age.

My goal here isn't really appreciation of money, I guess. They are well-off kids, and I am not scaling back my life to teach them how to live a simpler life. I don't think they will ever have the appreciation for money that a child who grows up in poverty has. They will experience un-met wants, but unlikely un-met needs. That kind of goal does not seem achievable for me. My goal is to teach them the value of money (i.e. car repairs cost money, we need to have money to do things like that), the skill involved with making money, and how to manage that money (whatever you have, you never spend it all). Which I do think is achievable.

[bisous]

We do the 3 bank system, dividing their money up into spend/save/donate. Starts typically sometime in their late 3s (mainly because they are starting to get monetary gifts from family) with 50cents per year. When they get older, it jumps at some point to $1 per year. The divisions is not precise, usually just split pretty evenly, or whichever way it is easiest to divide the money. So for age 3, 50cents in each bank. For age 4, 75cents in two banks, 50cents in the other. It takes a few years before they really understand the difference between the banks and start lobbying for the extra money in the spend jar. And usually we head into more complex financial management at that point, with the discussion of taking things like big checks from family members and putting it right into an interest earning savings account for college. This savings is separate from their regular savings bank.

We don't pay for basic chores. There is no option to not do basic chores, no "I'd rather get no money and do no cleaning this week." Anything they are expected to do daily/weekly, they need to do, as part of being a member of the household. No payment, just as we don't get paid for it. They do have the option to earn money for extras, though. I generally encourage this to be self-driven, i.e. they see a need, they fill the need. As opposed to me offering them money for tasks. Sometimes I do, though. Like when I decide all the mattresses need to be vacuumed and deep cleaned - not something I am putting the housekeeper on. And something I would enlist the kids to help me with if I wanted to do it. But instead, I may offer to pay a fee for them doing it, with no help from me.

But typically the "extra" options are things I am likely paying someone else to do, or didn't think to task out to someone else. The catch here is that it gets harder as they get older. A little kid might get paid for yard work, for example, despite not delivering great results. But if an older kid wants to get paid for mowing the lawn, s/he has to not only do a good job, they have to commit to it. I can't just fire and rehire the lawn guy every time my teen needs money.

The use of the banks kind of changes naturally with age. When they are little, their spend jar is up to them in terms of spending immediately or saving up for something better. They usually don't grasp the concept of spending, period. So saving it up for something better tends to happen just because it doesn't occur to them, when out and about, that they could just buy something. As they get older, they start to get more aware of wants and money, and this seems to be a personal choice. I don't really see a benefit to either method. The kid who spends immediately likes quick satisfaction from little things. The one who saves likes bigger, fancier toys. Whatever floats your boat.

The save jar isn't touched when they are little. When they get older, it becomes the option for a big "mistake." Car needs repairs - save jar. Dropped your school iPad - save jar. That kind of stuff. This is separate from their big bank savings account. My teen with a job has to split her paycheck between spend/donate/bank savings.

The donation jar is done yearly, at Christmas, with a lot of discussion before they donate to the charity of their choice. Regardless of age.

My goal here isn't really appreciation of money, I guess. They are well-off kids, and I am not scaling back my life to teach them how to live a simpler life. I don't think they will ever have the appreciation for money that a child who grows up in poverty has. They will experience un-met wants, but unlikely un-met needs. That kind of goal does not seem achievable for me. My goal is to teach them the value of money (i.e. car repairs cost money, we need to have money to do things like that), the skill involved with making money, and how to manage that money (whatever you have, you never spend it all). Which I do think is achievable.

Thank you for taking the time to write all of that out. You've highlighted some really important issues here. I'm thinking of my teen and what he is (not) capable of doing to my standard for payment!

Also, what is the expectation in your family for paying for college? In our family our (parental) contribution to college will be limited. I'm truly hoping the kids will save significant amounts towards college. They've already started--a little. I'm thinking because I've been too slow to work this all out with my almost 14yo that I need to jump start his savings and start something else with my younger kids.

[amandabea]

For DD (13), she receives $20/mo, not tired to chores. I work, DH works, her job is school. We get paid for working, so she gets allowance for going to "work" (school). We continue it through summer, since DH gets paid over the summer too (he's a teacher). DH and I don't get paid for cleaning the house, taking out the garbage, etc., so neither does she. We do it so we don't have a gross, stinky, ugly home.

This is essentially what we started dong for DD this year. It might be $25/mo. Money goes directly to her savings account. She's not much of a spender, so I expect she'll be able to save up for something she really wants.

[hillview]

my kids get their age each week (eg DS is 12 and gets $12 a week) it is automatically deposited into each of their bank account's (from our account into their's). DS1 has always been a saver so he has $1500+ DS2 saves and then spends so he has a few hundred. Mainly the idea is that if they want something we won't buy them they can buy it themselves with their own money. It has worked well for us. Chores are not tied to this at all, chores happen regardless of allowance it is part of being on our team etc. Sometimes they can make extra money when I need extra help but really I expect them to pitch in for most things.

[essnce629]

my kids get their age each week (eg DS is 12 and gets $12 a week) it is automatically deposited into each of their bank account's (from our account into their's). DS1 has always been a saver so he has $1500+ DS2 saves and then spends so he has a few hundred. Mainly the idea is that if they want something we won't buy them they can buy it themselves with their own money. It has worked well for us. Chores are not tied to this at all, chores happen regardless of allowance it is part of being on our team etc. Sometimes they can make extra money when I need extra help but really I expect them to pitch in for most things.This is us as well. DS1 just turned 14 so he gets $14 a week. DS2 is 8 so he gets $8 a week.

DS2 gets paid in cash monthly. DS1's allowance is deposited directly into his account weekly (transferred from mine). Pretty much everything DS1 buys is online so it's easy to just transfer the money from his account to mine.

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[dogmom]

We do $50 a month for both kids. (11 and 14 now) It has been less, we started about 4 years ago. It's been great. We tried the chore thing, we are not that disciplined and when they are young it is hard to find chores that work for them. I find it works better that they X amount, anything they want at the store when we are out the question is "Do you have the money?" It is all up to them. Sometimes they save it. Sometimes they spend it all on the first day of the month. Then they are broke for 30 days. My DD has anxiety, shopping and her asking for things was a real battle ground. She would get worked up about thinking about something, asking me for it, playing out the discussion in her head, etc., that by the time she actually asked me for it she came off as a brat because she had already had the discussion and fight in her head about 10 times. (Note: took me a while to figure this out.) Now, no battles.

We do have baseline rules. There are chores they need to do that have increased as they got older (set table, clean up after dinner, deal with dogs, mow grass, pick up room) that are just the things they do as part of the family. Whenever they whine that they don't get paid for things I point out they have food, clothes and roof over their head. They can spend it on whatever they want. Crappy plastic toy that is overpriced and will be thrown out in two months? Their choice. Now that doesn't happen as much and I manage to keep my mouth zipped about it. Stupid whatever for in game purchases? Whatever, it's their money. They decide. I think in the end it saves us money. Currently my son is paying me $15/mo since he went swimming with his iphone and we had to get him a new one. So, his expense for the next two years.

[AnnieW625]

None. My kids don't get money unless they get it as a birthday/Xmas present from a relative or if they tell me they want to work to make some money. If they ask me for a paying job, I tell them what the job is I have for them to do and we negotiate a fee. Their regular chores come first, though, and I don't pay for those. That's part of their responsibility to help keep our household running smoothly.

This is very much us as well, especially for the bolded part. If they get cash for birthdays or holidays the cash is theirs, if they get a check it is put it in the bank. This was the first year that Dd1 got more cash than checks and we left it up to her to manage. We aren't great about managing chores here, but if my kids want to do something especially on the weekend the chores have to be done. I grew up with a similar system as well. I am sure that as DD1 gets older that we will have to work something out allowance wise, but right now this is still working well for us.