At what age do you think...

[Izzy0906]

At what age do you think you should start an allowance? My daughter is GREAT with saving money (the child finds every coin and dollar possible and for month has been saving in a jar) and asked for money to save to buy herself small stuffed animals, games, etc...aside from the change she is saivng for our disney trip next year (gift from parents) The thing is she is only 6. My mom said pay based on chores but alot of her chores are kinda expected. Make bed, feed dog, empty trash, etc... What are your opinions?

[justpeachy92]

We give our kids $1 for each year of age. Their allowance isn't tied to chores, we use it to teach them about budgeting and saving for things they want.

[monkeywrangler71]

When we were kids, our allowance was a lesson in budgeting and money management and unrelated to chores. We had to submit a budget proposal to my father in order to qualify for an allowance and to apply for any increases. Budgets had to include a savings component, charitable donations, and reasonable expenses. Proposed savings and donations percentages were enforced (ie. we couldn't pad our spending with inflated giving amounts that we didn't intend to give). Our expenses had to be justified and negotiated in a budget meeting.

Personally I don't believe in tying allowance to chores because I think that chores are an expected part of being a family and shouldn't be subject to financial compensation. My spouse does not agree. Every attempt at an allowance with my oldest has been tied to chores, with no focus on managing the money once paid. She refuses to do anything around the house without being paid for it, and she treats her money like a demon that needs to be exercised from her pocket . I do not know if this is a direct result of the allowance for chores scheme or a symptom of her other behavioural problems or a combination of the two. However, I will be taking my father's approach to allowances for my younger children.

As to what age is appropriate, I think if your child is showing responsibility at this age then you should start them on a small allowance. Obviously too young to submit a budget proposal, but I would tell them how much of it is for saving and how much is for buying treats - so if they were say getting 4 quarters a week, 2 go in the piggy bank and 2 go in her purse for candy or whatever when you go shopping. She learns to always save a portion of her income, and she develops her math and spending skills by having to stay within budget at the store.

[jamie79]

I so agree. No tying chores to money. They are part of the family and are expected to do things around the house to make the house and the family run.
If we have them do something "special" or extra then we would give them some $$$.
Both my boys have learned about handling money thru opening an account for them. Whatever they got for b-day, Christmas etc they had to put half into the acct. The other half was theirs to do with what they wished. If they didnt have enough to do with what they wished they had to earn the rest. Mowing someones yard etc

[MisaLady]

I'd say that six is a good age for an allowance. I wouldn't make it based on chores, although you could allow her to do something EXTRA for more money. I know the guidelines used to be $1 per year of age, but things are so pricey now that I'd say $2 per year, if you can afford it, would be good. Do encourage her to save long-term as well as short-term (for instance "college fund" versus "cabbage patch doll"). Consider also having her save for charity - let her pick out the charity she wants (within reason of course: you could help her figure out which one, based on what you/she think would be a good cause... for instance, ask her if she wants to help feed the homeless with it or help shelter animals, then pick out a good charity and talk to her about it). If kids learn to do this young, they're more likely to do so as adults.

I wrote an article about using a "piggy bank" that you might find useful. I'm a big fan of piggy banks and still use one now! (Mine's a cow. Bessie, The Cash Cow, to be precise. She holds my coins.) Little kids especially love 'em.

[cab54]

I think if the child is showing an interest, like yours, it's a good time. It shows them what they can and can't afford 'yet'. It shows them why you sometimes say 'we can't afford that, honey. In other words, it shows them that there IS an end to the money.

I remember my younger son (Mr. Spendy) going to toys R us to get something he coveted, with his own money, saved up. He couldn't get it. Not enough. I didn't help, but I empathized with him. He kept saving, we went back and he got his treasure. He was ecstatic! Lesson learned. He was only about 6, also.

[Greebo]

If you don't base it on them doing something around the house, how do they learn that money is earned, not an entitlement, when they're older?

[monkeywrangler71]

If you don't base it on them doing something around the house, how do they learn that money is earned, not an entitlement, when they're older?

That is something that children learn by example, by having hard working parents who do not act entitled. It is also a lesson that is learned through placing an emphasis on school work and doing a quality job of every task you undertake. The concept that effort breeds result can be taught quite effectively without the use of monetary compensation. Once you master that concept, it doesn't take a genius to figure out the relationship between work and money.

[Izzy0906]

Thanks everyone. Even though she is 6, I was thinking $5/week with half going into a savings (not for Disney, that's change she collects elsewhere, cushions, boyfriends pockets etc...). She can choose to save all $5 if she wants or not, but I think $2.50/week should be saved. I remember being the saver when I was younger and my sister the spender. When we hit middle school, my parents started giving us a monthly clothing allowance of $25. They bought us our school clothes but special clothes (that leather jacket you just HAVE to have at 15 or the boots that everyone is wearing) was up to us to save that $25/month. I remember saving for 9 months just to buy a leather jacket I wanted when I was 15. By the time I had the money and went to pay, I decided against it. I couldn't part with the money I had saved lol

[ahmom]

I never gave allowances. I've never regretted it. My DD's are 22 and 17 y/o.

[mmy2grls]

My oldest, 8, always got an allowance for occupying her sister while I worked at home. I don't make my kids do chores for money but they do help when I ask them to do stuff.

[MRAHoffman]

BUT, I make him tithe 10%, put half towards college and the rest is his (something like $3.70 week). He is currently saving for a 5000 piece Lego set for $200.00, he has $41.00, he spent $2.00 the other day at the dollar store). Take care and God bless.

Rhonda

[frugal is fun]

this is such a great topic. My son is 3, turning 4 next month and I just started giving him an allowance. He gets $.25 a week. Most of the time he saves it but a few times he has bought that gumball at the grocery store.

I do it based on chores but now that I'm reading this thread, maybe its not such a good idea. I want to teach him about money, the importance of saving for something and living within your means.

Appears to me I need to put more thought into that $.25