One of the other ladies in a financial networking group asked for the group experience with raising children (hers is almost 13) and giving an allowance.  We were asked what we were doing, and how it was working out.

Here was my response:

How are we handling their allowance?

My kids are not yet the age of yours, but here is what we have done and planned so far.

Knowing mine struggle with executive functioning, we do not yet give an allowance. We are focusing on doing our daily and weekly and add-on (eg you are part of this household and you will do whatever the household needs) chores without needing constant prodding.  We regularly talk to them about how once they have the executive functioning to do these chores without prodding, then they will start earning an allowance for their chores, but only then – because spending money wisely depends on having executive functioning. If they can’t be trusted to properly take care of their body by brushing their hair and teeth every day, then they can’t be trusted to properly take care of their money.

Their being paid each week will be all or nothing, to simulate if you fall down on a job you will get fired and won’t receive a paycheck.  You get paid if you do your job, which is all of the assigned chores not just the ones you wanted to do.  (Note we’re not silly levels of rule-bound about this; if there was a legitimate reason then exceptions will be made.)

Our plan once they are earning is to have a per-child fixed allowance amount per week, with only a few, self-limited, labor-intensive chores for additional earning potential. For example, as a child I was allowed to pull thistle weeds out of the large yard at 5 cents apiece, a half cent apiece for dandelions (I’ll have to figure out something similar and inflation-adjusted rates) as options for earning more; and obviously we couldn’t do that in the winter. We want the children to know they can earn more but it’s a non-trivial hurdle and so they mostly need to learn to live within their budget and save ahead of time.

This is what was applied for myself and my siblings, and all of us turned out pretty money-wise.

So what else are we doing with them now?

We talk about what you can do with money is to save it, to spend it, to give it, to invest it, and how it’s good to do some of all, but that the easiest one is to spend it and so we don’t need to practice doing that so much  😉  We need to practice the other things to do with money instead.

Thankfully we’ve also limited their advertisement exposure, so they have grown up not constantly being bombarded with new things to want, and now that they’re older we discuss what advertisements we adults or they children are being exposed to, and what the advertising traps are, how they make us feel, and we focus a lot on nature and friends and family to focus on what we really need.  We (including the grandparents) model shopping second hand, both to take care of our wallets and to take care of nature.  It’s pretty easy for my kids to choose 5 perfectly good durable used gifts that will entertain them for days with lots of replay value and keep things out of the landfill, instead of 1 new essentially disposable toy that may break and/or lose interest value almost immediately, that cost as much as those 5 used items. Eventually we will be able to model selling what we have outgrown, recouping some costs and again keeping things out of landfills.  A Montessori and now pandemic-micropod education with other people with these frugal and sustainable values has allowed us to have lots of external adults support this mindset as well, and exposure to other children raised with these values, so it’s not just things their weird mom and dad do  🙂 

Before you think we’re depriving them of hands-on experience with their own money, several times a year they do receive gift money from some relatives, and have since a very young age – cash from a certain relative they know is to go into their bank accounts for college, and cash and gift cards that they set aside until they have a couple of giftings worth so they can go get the bigger purchase they want (often Legos or stuffed animals).  But that gift money isn’t a constant temptation to them, between nature and nurture I have kids who don’t feel like that money is burning a hole in their pockets.

So that is my family’s experience with money. What about yours?

How were chores and allowances handled in your house growing up?  How did that turn out, across the different lives and personalities of the other children in your family?  How are you raising your children now, and how is that working out in their money habits that you can see so far?