For our family, we choose not to tie chores and allowance together. Chores are done because they are a necessary part of family life and we’re all part of the family. We use allowance, simply to teach them about the proper use of money. Now, with that said, we would consider docking their pay if we had attitude or other issues, but that hasn’t happened as of yet.
We use these 4 compartment piggy banks which I love! We had them sign a contract agreeing to our terms which includes a “NO Loans Clause.”
Until this year, we paid $0.10/year of age, this year we increased it to $0.50/year of age, but we also increased our expectations of what they would use the money for.
- 9yo = $4.50
- 6yo = $3
- 3yo = $0.25 into a basic piggy bank & she does get excited about seeing it go in
Expectations: If the family goes out to dinner and they want dessert, they buy it. If we go to a movie (EXTREMELY RARE since there are so few worth seeing), they buy their treats. If they want a toy and it isn’t birthday or Christmas, they save up and buy it. They are expected to buy/create gifts for their siblings, grandparents, and parents at Christmas time, so they plan for this, too.
- 10% is Giving (They can choose to give at church or to missions or a special project.)
- 10% is Savings (Short term savings – a toy, gifts for family at Christmas, etc.)
- 20% is Investment (Long term savings – they don’t touch and we put in their investment acct. a couple of times per year.)
- 60% is Spending (Whatever they choose and whenever they choose.)
It’s been great. They’ve never had the gimmes simply because we didn’t allow begging in the store, but this is really helping them to learn to manage money well. If they choose a $1 toy from the dollar store that breaks that day, well, they’ve learned a good lesson. Recently, the two oldest both wanted a package of those silly band bracelets at $5 for 24, but they decided to spend $2.50 each instead and share a pack. Again, a good lesson learned.
My 6yo really wanted the light saber from Target until he had enough money to buy it, now he just wants to save his money until he finds something he really wants. Our 9yo wants a horse, we told her when she can buy and board one, go for it. Who knows, she might be able to do it on her allowance when she’s 50 or so
.
Anyway, this is what works in our house.
Lindsey, glad you like the Redemption Box. I forget where I learned about it, but it’s a great tool for our parenting tool boxes!
Blessings,
Christie