The sooner you start teaching your kids money, the more likely they are to develop good habits that will carry them into adulthood.
About two years ago my son and I were reading a book together and one of the characters was referring to his weekly allowance.
“An allowance?” my son asked. “What’s this?”
I explained that some parents give their children a preset amount each week for pocket money – often in exchange for chores or helping out around the house. My son was immediately fascinated. He asked if I would be interested in getting more help with cleaning and washing. And so began a mutually beneficial agreement.
My husband and I started our son with a $ 1 weekly allowance. He has since received a raise to $ 2 a week (you know, inflation), but he’s also got ample opportunity to make extra cash. For example, if he’s helping his younger sisters clean their rooms so we don’t have to supervise them, or keeping them quiet after school while my husband and I try to work, he can make a few more dollars here and there to help to strengthen his room pile of money.
That said, my husband and I don’t give our son a few singles every week and let him spend or lose the money. Instead, we implemented a system that taught him how to manage his money quite well. And now, at the age of 9, he already has a pretty good foundation for adulthood.
How we did it
When we started the allowance, we sat our son down and explained that we would not give him cash every week. Rather, we would open one saving account in his name. Each week we wrote down his allowance in a table to keep track of his earnings. And every time that revenue reached $ 50, we transferred those funds from ours Bank account to his savings account. He was on board immediately.
Nowadays, when our son wants to buy something like a new video game, puzzle or Pokemon cards with his money, we go to this table and debit the amount together. This way he can keep track of what he is spending and what he is saving.
My son really likes this setup, and I like it too. First, it’s a lot easier than taking piles of singles off the bank. But it also helps him understand the importance of saving. My son takes pride in the fact that his spreadsheet and savings account is growing, and he understands that the money that goes into his bank account earns interest (albeit a very modest amount these days). He also knows how to save up for certain goals.
Last year he wanted a video game that was priced at $ 60. He had enough money in his savings account but didn’t want to touch it. Instead, he waited to accumulate enough allowances on our table to buy what he wanted. He was proud to have earned this tidbit, and we were proud to have taught him that.
Of course, our son not only learned how to handle his money, but also learned that he has to earn this money. If there is a week when he is particularly unhelpful or not doing what he is supposed to, that allowance will be withheld until he makes it up.
Some people might say I shouldn’t have to “bribe” my son with extra pocket money to do extra chores around the house. But I really don’t mind, given the positive aspects. My son manages his money very responsibly and it is a pleasure to see him doing it. And he’s also very generous with it. The last two Holiday timesHe took money from his own account to buy presents for his sisters. And in my book that’s reason enough to keep our system going.