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As my kids have started to get older, I’ve thought more and more about how to teach them about money. From what I’ve been reading, there are actually three different ways to “award” children with money.
Allowance
The first, and most traditional, is the allowance. You get some money each week because “I love you”, and I make the money.
Allowances will let you teach them about saving, giving, and buying, but it lets them believe that they get it “because of their good looks”– in other words it doesn’t let you teach them about earning money and work. So, I’m not thinking that I want to give an allowance as much as I’d like to use…
Chores
In this scenario, I can use one of many printable chore charts to keep track of what the child does every week. Why print one out? Because it’s much cleaner and neater than writing one out by hand, and you’ll be able to change it as they accomplish some chore.
A chart also lends structure and accountability– at work I have a time card that I have to fill out saying what I spent my time on. And the link I gave you lets you download a chart and print it for free.
The upside to chores is that you get things done around the house, you give them incentive for doing things (which can help develop positive habits), but the negative side is that you have to keep it up to date, and that you set kids up to believe that they should only clean if they get money! Which had me considering…
Wages
That’s when I started wondering if I should pay my kids like I get paid– as a wage. I could establish a amount that they get paid a week, use a chore chart to keep track of what they did that week, and then have a periodic (maybe monthly) review and adjust their wage accordingly.
They could get paid when I do, we could still teach all savings and giving like the allowance, but they would have a little more security that if they had a bad week it wouldn’t be reflected immediately. Plus it would be the experience most like the real world.
What do you think? Which one do you do, and how do your kids respond?
We gave the ladies an allowance for their clothing and the corresponding responsibility. It was a wonderful teaching experience (we started at age 10) and I would definitely repeat it.
Rebeccas last blog post..Just Linking, June 5
@Rebecca: Right now the only income my kids have is $1 for every verse they memorize and say to my mother, their grandmother. That, and they make out very well at birthdays.
I’m hoping to give them some more incentive to do work.
Hmmmm…It wouldn’t help with getting them to do more work, but an excellent system I’ve heard of is not giving them any money on weekly or monthly basis. Let the only money they get come from birthdays and Christmas. The children I know who were raised like that learned to save their money very early and only spend it on what they really wanted. They also went out and got jobs at earlier ages than people I know who were raised differently.
@Loc: That’s pretty much the system that we have going now– except having to save for over a year to get something big doesn’t give them motivation, and no short term jolt.
I’m looking to do something that will teach them to budget– to save stuff long term, short term, and then have spending money. I think one of the biggest downfalls of money management with kids is that they have no concept of anything but using credit when they can, and being enslaved by it.
But relying strictly on birthdays and Christmas would make it easier on the family’s overall budget!