Teaching Kids What to do with their Allowance
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This is the last part in a 4 part series on children and money. You can read the first 3 posts, too!
- Day 1: Raising your Kids to be MONEY SMART
- Day 2: Allowance: 2 Simple Systems you can Implement Today
- Day 3: Determining How Much Allowance is Appropriate
In the other parts I discussed why it’s important to teach kids about money and what happens if you don’t. I discussed what kids do to get an allowance. Last, I discussed how much children should get for an allowance. Today, I will talk about what should kids do now that they have the money.
We give each of our 3 children different amounts a money. I don’t believe my 5 year old needs the same amount as my 10 year old. The older they get, the more they understand about what having money means.
My 5 year old get $2. (I don’t require her to put anything into giving yet.)
My 7 year old gets $4.
My 10 year old gets $7.
We require our kids to divide their money up into 3 categories.
1. Giving We have a envelope and each child is required to give $1. My husband and I sponsor 2 kids in Nicaragua and 1 child in India. Every year we buy gifts and send them at Christmas. This past year the money they saved paid for the gifts and shipping. The kids and I got the money and we went shopping. They enjoyed picking out the gifts for the children. My older son and husband have met the children in Nicaragua and he loved picking those gifts because he actually knew them and it felt very personal.
2. Savings We require them to save. My older son saves $2 and week, while my younger son and daughter saves $1 each. We talk to them about what they think they might be saving for, a skateboard ramp or nerf gun. My older son went to Nicaragua on a mission trip and we told him if he wanted to go back he had to help pay for it this time. He is using his money to save for his trip back.
3. Wallet money This is money they can use whenever they want. If they want to eat at Subway for lunch and we aren’t planning on eating out, they can pay. We go to a lot of baseball games for my older son and I don’t buy candy at the consession stand, but they have money if they want a special treat. My daughter loves The Dollar Tree. She can buy anything and she spends a lot of time picking out what she’s going to get. Each of our kids have their own wallets and are responsible for their own money. Here’s the one my daughter has. It’s really cute!
This is what we do in my family for now. I’m sure as the grow older, we will change things up. I hope that me telling you how I do things can help you make a plan for your family and get you started with your kids, giving them allowances, and teaching them about money.
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