When it comes to allowance, I’ve found that most parents (myself included!) don’t just want to hand kids money; we want it to mean something. We want allowance to be more than pocket change; we want it to teach our kids responsibility, values, and independence. For us, allowance is less about “getting money,” and more about giving our kids a safe place to practice with money before they’re out in the real world on their own.
Prior to having kids, I came across Ron Lieber’s book The Opposite of Spoiled. Instead of allowance being a “reward/bribe” or a “trade” for chores, or just an easy way to buy toys, Ron Lieber shows how it can be a tool for teaching kids about money – how to save, spend, give, and make mistakes along the way. The book really resonated with me, partly because Lieber’s approach is very similar to what my parents did with my siblings and me growing up, and I feel like we all learned so much from it, and partly because, it’s a way to teach gratitude, learn true money management, and still keep the household running with a team mentality in mind!
I’m writing this one as a Q & A to get to the points that matter to all of you! So, I compiled the questions you sent in. Here we go:
Why Is Allowance Not Tied To Chores?
If you join through the Conscious Parenting Membership for December’s Webinar (or re-watch, depending when you’re reading this) about Conscious Chores, we will get more into this, but basically we don’t tie allowance to chores, because household tasks and chores are the responsibility of everyone in the house, and we think that everyone should take part in them because we are a family, because we are a team, and because we need the household to function – we need clean clothes, we need food on the table, we need to be able to walk on a clean floor. Some people could argue differently, but to us, these are tasks that we want our kids to have intrinsic motivation for. One day we may have “additional jobs” around the house that could be deemed as worthy of a “paycheck,” but those will be seperate. In addition, I also feel like with this method we are eliminating power struggles between necessary household tasks and withholding allowance or not.
Why Are We Giving Allowance?
So, why are we giving allowance then anyway? Why don’t we just buy our kids what they need and want, since it seems allowance is doing the same thing? Well, because we are our children’s guides and teachers! And what better time to learn about managing money than right away?! Allowance teaches them how to save, teaches them to be intentional with their spending, offers them the opportunity to give back, gives them guidance in budgeting, and overall, gives them responsibility and a little independence!
What Age Did You Start?
Our intention was to start at 5-years-old, but we ended up starting earlier with our oldest, partly because…you know when you are at the store and your child asks for everything, and you can only say, “Let’s put that on your wish list!” so many times? We realized she was ready to hear, “Let’s look how much that costs and you can save up your allowance for it!” So, pick an age, or pick a point when you think your child is ready to take this responsibility on. This method does truly help with all those ‘wants!’
How Much Allowance Do You Give?
You can choose age-appropriate amounts that work for your family. We started with $2 a week. We give it in cash, so it can be tangible. I know the world doesn’t work in cash, but at the age of 4 or 5, seeing numbers on a computer just doesn’t seem real. Holding coins or bills in your hands does. So, we made the three jars – she has a mason jar for Spend, Save, Donate. When she gets the $2, she gets to decide where each dollar goes. We let her do that all on her own, and if we notice she has been neglecting one of the jars for a few weeks in a row, we may mention it, but that hasn’t happened too many times. $2 doesn’t add up extremely fast, so at the end of the year, we take the save money and put it in her bank account (yes, we still got her a bank account, even though I just talked about numbers on a computer screen), and if she hasn’t already donated to little things, we help her choose where to donate her donation lump sum at the end of the year too. For spending, let’s get into that…
Any Rules About What They Can Spend On?
Being 5, our oldest is still at that sweet spot age, where she needs our help to spend the money that she’s been ‘saving to spend,’ so we are still her ‘guide’ in a lot of ways. When she has an idea, we can discuss how much it costs, how many weeks she would need to save for it. Sometimes by the time she has enough for the thing she wanted, she’s moved on to something else. Talk about the goodness of waiting, or delayed gratification! So, we don’t have major rules on it, but I’ve heard others say they make rules about “it can’t be spent on candy” or whatever value your family decides to put a boundary around. It does help them learn pretty quick though that, “Once you spend your spend money, you have no more spend money…!”
What Do You Do With Money Received As Gifts?
A lot of the time, she has gotten gifts that are gift cards, so she can choose how she spends it (again, with some guidance), but when it’s cash gifts, we’ve made choices for that on a case by case basis. Majority of it goes into her bank account or her education fund, but if she’s planning on “saving to spend” to buy something special, some of that gifted money can go into the spend jar!
When Do You Increase The Allowance Amount?
Even though above I said we give $2 per week, Lieber’s suggestion (at the time of writing) was $1 per year of age per week, but obviously that amount or approach won’t work for every family. When I was a kid, I remember that when I wanted an allowance raise, I had to sit down with my parents and explain to them why I wanted/needed/deserved a raise. Boy, was this a great life lesson when I needed to do the same thing with my bosses! My brother’s family’s method for asking for a raise requires them to write a letter. So, additional learning in the mix! Growing up, my parents also taught us about paying back loans – we’d borrow money from them for something and then have to pay them back on the first of every month. There’s so many good money management lessons you can work into your life with this! So, all of that to say, increase as it works for your family!
These are valuable lessons, and I think offering allowance in this way opens up so many important conversations and opportunities to guide them into making thoughtful decisions. Happy money-learning, y’all!!