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In our home we've handle Kat's allowance like this: She received no allowance as a pre-schooler. When she turned 5 (the summer just before Kindergarten), we decided to give her 50¢ each week. At age 6/Grade 1, we began giving her $1 each week. Her allowance was raised to $2 per week when she reached age7/Grade 2, and to $3/week at age 8/Grade 3. This pattern will continue until she turns 12/Grade 7, at which time we'll review and decide if the dollar increase is going to be enough.
In addition, with each birthday, her household responsibilities (aka, chores) increase a little. But what is a little different compared to many families is that her allowance isn't dependent upon her doing her chores. She is expected to do chores regardless, because she is a part of the family and we all contribute. If she balks at doing them and/or slacks off from doing them, the consequence is that she doesn't get as much screen time (TV, computer, video games) as she'd like.
She receives her allowance regardless of whether she does her chores. We do this because we feel that the lessons she can learn about money are more important, and we want to give her the tools to learn those lessons. When she receives her allowance each week, we go through some counting exercises and work out several hypothetical money scenarios. From her allowance, she is required to save 10% to put in "the big bank", which is her savings account. She's also required to save 10% to donate to charity periodically. Since we are not a religious family, we don't tithe, but we do contribute to charity; Kat's chosen charity at the is time is the local no-kill pet shelter.
The remaining 80% of her allowance is hers to do with as she pleases. In the summer, she often spends her allowance at garage sales. But this past year, she has patiently saved most of her money, along with gift money she received from family members and a bit of money she earned from having me sell a couple of her toys on eBay. Last week, she had finally saved enough for this:
It's the Pirates of the Carribean Black Pearl Lego set! It's a big set with 804 pieces. We've been monitoring the price, both online and at local stores, and it has fluctuated between $75 and $100 over the last year. About 10 days ago, I found it discounted online for $84 + $5 shipping, with no sales tax. At the same time, in a local store it was $99 + tax (about $9). At the time, Kat had $82 dollars to spend.
We decided it was a "teachable moment"; the $19 she would save by ordering online was a good enough lesson, in our opinion, for us to advance her the $7 she needed to make the purchase. We explained to her how much money she would save, how she would have to "wait for her ship to come in", how she would have to give us all the cash she had saved so we could pay for it from our account, and how she would not be getting allowance for the next three weeks in order to make up for the amount we were advancing to her. We also gave her the option of NOT ordering and waiting until she had the amount in full, but explained that by that time, the toy would very likely not be on sale anymore. The decision was hers, and she eagerly asked us to go ahead and order it.
It arrived late last week, and it took a couple of hours to assemble completely. I asked her if it was worth saving and waiting for, and she said it was. I asked her if it was everything she thought it would be, and she said it was except for the size. It was a little smaller than she thought it would be. I asked if she was disappointed, and she said she wasn't sad about it being smaller, just surprised.
I'm proud that she saved her own money for the Lego set. I wish someone had encouraged this for me as a child or teen. As it was, my siblings and I didn't receive an allowance until we were teens. We didn't have a lot of material possessions (especially not brand new ones) nor did we didn't ask for a lot, but the things we did receive were given to us. We didn't have to save for them. Looking back, I think that would have been a helpful lesson for us to learn.
How do you handle allowance and chores in your home? What about the spending and saving of allowance? And while you're at it, tell us how you handle electronics and screen time. Do your kids have to earn it? I'm sure you have some great ideas, so please share.
