You Might Be Surprised Why I Give My Children An Allowance

in money •  2 years ago  (edited)


You Might Be Surprised Why I Give My Children An Allowance

I give my children an allowance, but it might not be for the reason you think.

We live in a time in history when a lot of people feel that they most be rewarded for doing good. There are appropriate times to encourage, to build up, and even bless others for the good things that they do. But there is also a need for people to understand that fulfilling their duty and serving others simply is the right thing to do, even if they are not compensated.

I do not give my children an allowance to do chores

A lot of families reward there children for doing chores. There is nothing fundamentally wrong with giving an allowance for doing chores, but my wife and I take a slightly different approach. We have a core list of household chores that we expect our children to do without any form of guaranteed compensation.

We simply expect our children to do chores because they are members of the family. We want our children to contribute to the greater good of the family without expecting anything in return. We teach them how to serve other members of the family through these household chores.

Our expectations are different for each child based on their strengths and abilities. Some of our children protest more than others when it comes to chores, so consistency is key!

There are some rare cases when we would financially reward a child for something that falls outside of the realm of normal household chores. We try to make this an exception, not the rule.

Allowance is all about teaching money management

I believe that learning how to manage money is a life-skill that everyone should learn to master. For me, giving my children an allowance is a tool to help teach them this important life-skill.

I start giving an allowance to my children when they turn 2 years old. Each child receives a sum of money based on age. Once a child starts receiving an allowance, I start to teach three important concepts:

  1. Spending
  2. Saving
  3. Giving

These concepts are taught at an age appropriate level, but most importantly I reinforced these ideas every time I give out an allowance.

Spending - 70%

Spending money is the most common use of money, but it is not the only use of money.

Spending falls into two categories:
a) meeting basic needs
b) having fun

I teach my children to spend 70% or less of their monthly allowance. Although our children are not responsible for meeting their basic needs, I want them to learn to control their spending. I help them think through how making a purchase today will impact their ability to make a purchase in the future, but ultimately they must make a decision about whether or not they will buy something.

Saving - 20%

I require that my children save 20% of their allowance. This "saved" money is set aside in a separate account or in a special place in the house. I allow my children to use they "saved" allowance to make large purchases. This "saved" portion of their allowance is used for future, planned purchases.

My end goal is to help my children create healthy habits that will lead to investment savings and retirements savings.

Giving - 10%

I give my children an allowance, because I want them to use their money to serve other people.

I teach my children to give away 10% of their allowance. We encourage our children to think of ways to bless people who are less fortunate than our family.

I do not give my children an allowance because of chores. I give them an allowance so that they can learn to manage money well and bless others in the process!

Share about how you give your children allowance in the comments section!

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Excellent article.
Now this is what I call teaching economics 101.

Hey @kyriacos! We have to start off with the basics for the young ones so that they can master the hard stuff later.

Nice article :)
I absolutely agree. I´m thinking about starting this soon with my 3 year old.

Thanks for the comment. You can never start to early in teaching this important life-skills.

great post, it is really important to teach kids not to expect money for any little help they render.

Thank for commenting. I completely agree that we should not teach children to expect payment for helping around the house.