Money & Children – How it Works At Our House

To Give Money Or Not To Give Money

It took me a number of years to decide whether we should give our children a regular allowance or not. Should we just expect their daily help and then maybe give them money for extra jobs? Would a regular allowance, whether they were obedient or not in doing chores, make them think they would get money, i.e. a reward, regardless of how they performed?

The Types of Jobs

Finally, after getting rid of our housekeeper and training our older ones in sweeping, vaccuuming, picking up, cleaning bathrooms, doing laundry, childcare, changing diapers, cooking meals, etc., (you can read about that in Our 5 Step Process For Chores,) we decided they definitely deserve a regular allowance. And we are thrilled that they are becoming so capable at such young ages. This bodes well for adulthood. Of course, there is always some new area of training needed, but we feel we are on the right track.

Not sure what I said to get her to pose like this, but it sure is cute!

The Time To Train

One good thing about homeschooling is that it allows us time for these things. If they were in school all day, I am not sure how this would work, though I do know “where there is a will, there is a way!” We see this “work” as absolutely essential training for adulthood. In fact, at this age, it is more important than math facts, history and Four Square. (Though they are learning those too:)

The Age To Train

If laziness is allowed early on (5, 8, 10 years old) it will infect a child making him or her think, even more, that the world revolves around their desires. Imagine that child at 16 or 25 or older. Not a pleasant thought. We have certainly slacked off many times in the “laziness” arena. With ourselves AND our children. But one of our biggest desires is to succeed in that area.

You KNOW I love to call deboning a chicken “Science Class.”

The more children we have, the more I realize how important it is to sow the mentality into them of “helping the family.” Even a 2-year-old can line up the shoes, or take things to the trash, or pull out the clothes from the dryer.

Luke LOVES to vacuum.  These are the paint chips from Dad scraping the outside of the house.

My husband continually has Henry, 7, repeating the question “Hey Dad, how can I help the family?”

Now I’m no professional photog, but I think that sunlit glint on the top of his hair with a blurred background is what we are going for.  Works for me.

HENRY

Training To Save And Training To Spend

In addition to “work” training, there is a huge need to train our children in “how to manage money.” Oh my. I am astounded at how long it took my husband and me to really grasp what we needed to do in the financial part of our lives. See this post on How We Handle Our Finances As a Couple.

Here Is The Key (I do love to kill 2 birds with 1 stone)

We decided that not only would this regular allowance be the children’s portion for all of the work they do at home, it would also be their training ground in how to save, invest, tithe, give generously and spend their hard-earned money.

SO HERE IS OUR PLAN

If you like this plan, but it isn’t in your budget, maybe lessen the amounts and also lessen the categories to just a few essentials like tithe, spend, and save.

Our children are 12, 9, 7, and 3. You get to join the plan when you turn 6. But even the 3 year old is doing jobs. (The 9 and 7 year olds were 8 and 6 when these photos were taken.)

Each child gets a binder.

The binder has 6 6×9 manilla envelopes in it that are 3-hole punched.

The 6 envelopes are for 6 categories.

Each month, each child receives their age x $4 (4 represents $1 per week) that is then divided into the envelopes.

So, since Emma is 12, she receives 12 x 4 = $48/month.  Meg receives 8 x 4 = $32/month.  Henry receives 6 x 4 = $24/month.

Yes, for these 3 children that totals $104 a month and there have been times when I wanted to cut that expense out of our budget, BUT it truly IS a big priority. So….it stays in the budget.

And before you think that is a lot of money to give these children, here is how it is divided into their envelopes.

#1 Tithe 10%

#2 Free Spending 10%

#3 Generous Giving 10%

#4 Living Expenses 10%

#5 Short Term Savings 20%

#6 Long Term Savings 40%

I have adjusted these percentages over the years and as my husband and I got into the Dave Ramsey plan, increased their savings percentages. You can adjust these to whatever works for you. And you can change them over time. I found this plan from a mom on the internet years ago. I have no idea who it was, but thank you! I remember she said that her 12 year old son asked to increase his long term savings to 50% at one point. Sure, that’s fine. But increasing free spending is not going to happen :)

Category Descriptions:

Tithe

The Bible clearly says give 10% of your income back to God if you want to be blessed. When we started tithing about 9 years ago, there was a marked change in our income level. Yes, believe it. The moment income comes into our house or bank account, the very first thing that happens is 10% is taken off the top and put into a tithe account. Then we don’t accidentally spend it. We tithe on the gross, instead of the net, so that our taxes are blessed too :)

Generous Giving

This is for gifts whether birthday gifts for friends or family, christmas gifts, etc.

Living Expenses

I see this possibly changing over the years depending on the child. Right now, of course, we provide all of their clothes and their day-to-day living expenses. I let them take this money to the Homeschool Conference in May to spend on educational items that they would like. The conference is a feast for the eyes and it is very easy to overspend, (trust me, I’ve done it.)   I have my budget for our homeschool needs. If they want extra, they use money from this category. As they get older, this will probably change.

Short Term Saving

I not really sure what this will be for yet. Possibly a car. (Ugh, I don’t want to think about that.)

Long Term Savings

This is for the real long term. When they save up enough we will help them invest it. It may turn out to be their retirement nest egg or maybe they will use it to buy a house when they get married. It will be exciting to see how this money grows for them starting at such a young age.

Free Spending

My husband is really good at taking them to a store like Walgreens or Ross or Dollar Tree and examining with them the item they want and then discussing whether or not it is a good value. I was with Henry, 7, the other day and he was going to buy something and said “Do you think this is a good value Mom?” So cute.

Emma, 12, is extremely frugal.  Meg, 9, is still working on that skill.  She can sometimes have that money burning a hole in her pocket so this is what I finally figured out with her.  When we are standing in a store looking at a toy she wants to buy we might discuss it for a few minutes, then I suggest she or we pray about it and see what she thinks God is telling her. 9 times out of 10 she says God is telling her to save her money. Wow! Pretty awesome that these babies can crucify the flesh in a Godly moment like that.

So, in actuality, these children only get a few dollars a month to spend.

Extra

They CAN make extra money by doing extra jobs and their grandmothers tend to give them gift cards at various holidays so they always have a few dollars available and if not, they are motivated to earn some.

For instance, the other day Meg earned $10 by scrubbing the black gunk off the stovetop. It was a huge job. Caked and burned on all over the backsplash, the griddle, etc. I had been staring at it for a year (I’m embarrassed to say) and finally had the bright idea to pay someone!

Think Big

We are also just starting to encourage them to think in entrepreneurial ways probably leading toward starting a small business.

Other Rewards

In addition to their regular allowance, we try to regularly reward them with treats when we are all working hard as a team on a project that is not for extra cash. Maybe after a long afternoon of yard work we will head over to Sonic for a slush. They LOVE that! Or maybe an M&M for going to the potty or for practicing the “Come here” game (the most basic and important thing a parent can teach a child.) You know, “Luke, come here.” If he doesn’t obey that command, life is a whole lot harder for mom and dad. Or maybe baking and decorating cookies.

Rewards are very important!

This is our plan. It is really working well for us so far. Do you have a plan? I’m always up for new and better ideas.

God Bless You and Your Sweet Babies!

 

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2 thoughts on “Money & Children – How it Works At Our House

  1. We’ve done something really similar! And I love all your photos illustrating everything!

    We’ve given our kids an allowance since they were 3. They had to work for it, and then they had to divide it up, although we only used 4 jars: tithing, long term savings, short term savings, buy now (which was usually chocolate).

    I love how you’ve expanded it! I find the key to making an allowance work is to NEVER BUY STUFF WHEN YOU’RE OUT. If they want a chocolate bar, they have to spend their own money. If they want a treat, it’s up to them. I’m not mean; occasionally I’ll buy something just for fun. But they need to get the idea that to get stuff, you have to earn it. And then, in turn, I’m generous with the allowance! But if the kids get whatever they want anyway, there’s no incentive for them to work!

    Thanks for this post! I’ll link up to it on my blog!

    Sheila from To Love, Honor and Vacuum
    .-= Sheila Gregoire´s last blog ..Yearning to Live Radically =-.