Everyone likes having a little cash in their pocket, even if it’s not much. There’s a freedom of choice attached to pocket money, a subconscious autonomy in how we spend, save, or share it. My husband and I both have an allotted bits of personal money in our monthly family budget, a small amount of cash budgeted (even in the hardest financial times) for each of us to use how we will without excuse or explanation, without the internal conflict of self versus family needs. I tend to spend my own on books, something to wear, or tasty drinks with friends, while my husband more often patiently saves. I notice the same confidence of choice in my children when they receive birthday money or their bi-weekly allowance. They have the power to choose whether to purchase something small and instant or to save for something bigger in the future.
Since my husband and I have always both agreed that every family member, even the littlest, needs to contribute to the home’s well-being, we haven’t given allowances until more recently. In my idealism, I’ve always hoped the completed work itself would be a reward. But seriously. They. Are. Children. A clean home and completed school work will never feel the same to them as purchasing something they really want when it’s not a birthday or Christmas. As they grow, their own lists of personal wants and goals seem to grow also. So we opted to give each of our children a bi-weekly allowance related to their responsibilities around the home, hoping an allowance will serve both as a small, concrete reward for their work and provide simple lessons about financial responsibility.
The children’s allowances are allotted by the amount of their responsibility. Liam, at age twelve, naturally has more work than Olive, at age six. At this point, they each currently receive what equates to $3-4/week, and we distribute it every other week, as we take out our own cash for all of our family expenses. Since one of our goals through this is to teach our children about fiscal responsibility, they immediately divide their bi-weekly cash into three categories: GIVE, SAVE, SPEND. We use re-purposed (and clean) gelato containers for their cash. Fancy, right? ;) There is one family GIVE jar, and each child has their own SAVE and SPEND jar. Each week, they are required to put something in both the GIVE and SAVE first.
GIVE | This is our one community jar. As our family becomes aware of needs around us, one might suggest, “I think we need to take $__ out of the giving jar to give to __.” We then talk about it as a family and decide an amount together. As the holidays approach, we’re already beginning conversations about how we might use our give jar during the season. This jar helps our children recognize need and see the ways our money, even the smallest bits, can encourage, inspire, and love others.
SAVE | The save jar is treated as a long-term savings. Again, we let each child determine how much they want to add, but we do require they add something to their savings from each allowance. When they reach $100 (only one has yet), we open a savings account for them to begin storing their money at the bank. We treat the jar like a real savings account: deposits only. This is an area we use to talk about long-term goals with them: purchasing a car, saving for college, or traveling the world when they are older.
SPEND |Whatever is left over goes into their pocket or spend jar. Here they also save but for purchases in the nearer future. For instance, last year, the boys chipped in together and bought a video game console. This is where they often buy birthday or Christmas gifts for one another, or tiny treaties that I might not. Olive loves to carry her purse everywhere and will often keep a dollar or two in her wallet to buy gum! Either way, it’s theirs.
Our children earn money in other ways, too. The last two summers the boys have mowed lawns in our neighborhood and the girls have helped bag leaves. If there’s a larger home project, such as cleaning the garage or washing/vacuuming the car, they may also earn an extra bit of money, too. It’s not an exact science, but a simple way we hope to teach them about the world. On the rare occasion (as it happened last month), if their attitudes are poor or they are consistently complaining or not finishing their work, we withhold allowance. Although it pains us, we want them to remember, this way of earning money is a privilege, not an entitlement.
What about you? Do you have an allowance set up for your children or a way they can earn pocket money?