Advice on How to Set up Allowance

Oh, I was so excited to answer this...

I just started a new system with my girls. A girlfriend's sister does it. First, a little background; I have two daughters, 5 and 3. I started an allowance based on Clark Howard's suggestion (found in his book). He suggests that by age 5, allowance is a good idea. The kids do chores they can do (put clothes away, set and clear table, sweep, etc.) and they get paid $1/week. I started this and keep telling my girls that they can go with me to the bank to deposit the money they've earned in a savings acct, but we never make it. Also, I've let them "shop" once and I have to keep track of what they've spent. It was tedious. Now the good news!

I went to Big Lots and bought poker chips. I broght them home and told the girls that from now on, they will earn "chips." I started just this week. I bought a Valentine's Day plastic cup for each and that's where they "bank" their chips. Right now, I'm "paying" them for doing the right thing (getting out of bed the FIRST time I ask, getting dressed BEFORE I ask, etc.) Initially, my goal is to get their morning behavior where it needs to be so we can have a smooth transition to school/work. It's working like a charm. They're acting like little angels in order to earn a chip! It's tangible and they can watch their chips grow in their cups. I have taken a chip away only once. My 5-yr old was having a tantrum and her continued behavior (defiant) was unacceptable. I gave her a warning that if she didn't stop behaving that way that I would take a chip away. When she didn't stop, I took one. It stopped her cold!

So, anyway, as they're in the habit of doing the right thing, I'll concentrate more on "paying" for chores. I want to get the behavior set first.

Each chip is worth a dime. They will get to "cash" in at the end of the week.

I hope this helps!

S.

we do not do allowance with our kids but when I was little my parents gave us a dollar a week- but it was chore based and thus our responsibility. My mom made a weekly chart that hung im our rooms- we earned 10 cents for every chore. We had things like "make bed, wipe table, clean mirror, etc" We put an X by each chore as we got them done-if I failed to do my chore then my mom would draw a circle. at the end of the week we would "tally up". If I didn't do my small amount of responsibilities then I didn't earn my money. Anyway just thought I'd share

I recently read 1,2,3 Magic to help me deal with some behavior problems I had with my daughter. The author recommends giving a child 1/2 of an allowance because he is part of the family, and the other half for completing chores. That can work well for the parent because you can then "charge" them for not completing tasks. For example you could tell your child he needs to collect all his laundry and have it in the laundry room by a certain time. If he doesn't do it you can charge him $1.00 (for example) to collect his laundry. You could also use that for picking up his toys, feeding his pet, etc... Hope this helps :)

What my husband and I did when it was time to give our children allowance was to assign pay for chores. An example was taking out the trash earned them a dollar, putting laundry in the washer was 25 cents but drying it and folding it earned them another 75 cents. We created a chart and each time they did the chore in a two week period we would make a check mark beside it. At the end of 2 weeks we would add up how much they had earned. It worked out well with our children because it taught them that you have to do a job in order to be paid.

We are thinking about this right now for our 5 year old as we want him to understand the value of hard work, money and how important it is to make good decisions with your money. We are still in the thinking stages but one thing we have decided is that he will have a few set chores that he should understand are his responsibility and that those chores are NOT what he is receiving his allowance for.... we believe that kids should have an active hand in keeping up the house and helping around the house so that they are active members of the family/household. His allowance will be for those extra chores that he can take on throughout the week (like helping me out making dinner, helping to fold clothes, work in the yard, etc. He will lose priviledges for not doing his usual chores, not allowance..... still got some stuff to work out on this... Anything you or anyone else comes up with though would be good info.... send it my way too! Thanks!

Hi A.,

I think you are doing the right thing to start teaching your children about money now. It is an important life skill that many of us never learn until we get into debt as adults!

I have been working through some ways to handle allowance with our 9yr old daughter and here is what we came up with.

First, my mom found a 3-part bank; 1 part church, 1 part store, and 1 part bank. We have our daughter put money in each slot each week. You could do the same thing with 3 jars, cups, whatever. More about that later...

I believe, as others have mentioned, that being part of the family means having responsiblities that have to be done - no $$ attached. As my daughter gets older, she gets more chores. Allowance is not related to that. If she doesn't do those chores, she gets privileges taken away. However, we have been experimenting with "fines" for bad behavior - at this age with her it is talking back and being sassy. We only fine from her "spending" or "store" money since we feel it is still her responsibility to save and give to the church. She can also earn extra spending $$ by doing extra chores (such as washing the car).

As far as the amount, I surveyed other moms from her class and got a huge range, so just give what you can afford/feel is fair. We also have her give 10% to the church and another 10% to the charity of her choice. She is at the stage where she is very aware/worried about the environment and children who are homeless and hungry and so we are encouraging her to give extra to these causes. We also have her save 20%.

We don't make her buy her own clothes or school supplies, but if there is a pair of shoes or shirt that I think is too expensive that she really wants I make her spend her own money on it. Mostly she spends it on toys and books. She is learning to not buy junk because when she buys something that breaks right away I try to get her to look at why and see that quality matters and to spend money on stuff that will last and not fall apart. (I try to sneak that in because she is starting to get at the age where she won't listen if she thinks I am "lecturing") :-)

Good luck!

L.

You might think of setting up a savings account in his name. This way, he can put the money into the account that you give him and you can keep track of what you put in if things don't go well. This is a great way to start helping the kids learn how to keep track of their money. He'll be excited to have a grown up account to put his money in.

We use the rock system. Whenever they do ANYTHING good at all, they get to put a rock in their bowl. If they do something extra special or a big project, they get to put a big rock in it. If they cheat, all the rocks go back in the big container and we start over. At the end of the week, the small rocks get .10 each and the large ones get .25. It is funny, but usually each of my 3 kids gets about the same amount every week. 10 year old girl $7, 8 year old boy $5 and 5 year old boy $3. Also, if you are low on money, just keep the rocks in their bowls and pay them when you can.

Hi A.,
I heard this tip on the radio, and I think it's a good one. Whatever money you give him, encourage him to give the first 10% to church (or some other charity) and to save 10% in a savings account. Then he can spend the other 80% on whatever he wants (& save more of it if he chooses.) This will be good practice for the rest of his life.
Hope you like this idea. Good luck!
Susan