When should parents introduce an allowance to their children? I hadn’t considered this much until recently. I always assumed it would be during report card season—perhaps to encourage those A’s and solid B’s—or when we established chore charts for the fridge. My belief was that allowances were a reward for good behavior; that my kids would need to earn their money. I had only one real question on my mind: What’s the standard rate for kids’ chores these days?
Then, a friend shared an enlightening article from Slate, which challenged my assumptions about allowances. The experts indicated that the right time to start an allowance is as soon as children begin asking about money. Research shows that preschoolers can already distinguish between wants and needs. This revelation struck a chord with me, as money has always been a source of discomfort for me. Growing up, I was never taught how to discuss or manage finances. As a young professional, I struggled to negotiate my salary, often leaving money on the table because I lacked confidence. I certainly don’t want my kids to feel that vulnerability. So, how do I instill the value of money in them?
My husband and I decided to dig deep into the principles of financial literacy for children. While we currently live paycheck to paycheck and saving feels foreign to us, we resolved that our kids would have a different experience. Not only did we need to teach them to be comfortable discussing money, but we also realized we had much to learn about personal finance ourselves.
We took the advice from the Slate article to heart. For each child, we set up three jars labeled “Save,” “Donate,” and “Spend.” Every Friday, which our kids affectionately call payday, we give each child a stack of one-dollar bills corresponding to their age. This means our older child receives more than the younger one.
The beauty of the three jars lies in their ability to convey the values we want to instill. The spending jar should have the least amount, highlighting the importance of prioritizing needs over wants. The savings jar teaches patience and the reward of saving for something worthwhile, while the donation jar emphasizes the impact of using money to help others.
Here’s the twist: we don’t tie allowances to behavior or performance, which was initially challenging for me. Allowances must be given every week without fail. The reasoning behind this, as the experts at Slate explain, is that allowances are educational tools. We wouldn’t withhold books or art supplies if our kids didn’t finish their chores, so we shouldn’t withhold money either. If we want to break the cycle of poor financial habits, we must teach our kids that money is a tool for learning.
After implementing these changes, we’ve been amazed by how our children now discuss and manage their money. Just last Saturday, we allowed them to withdraw $10 from their savings jars to buy toys. They spent over an hour deliberating between a superhero set or an art kit. They understood the months of saving that went into that decision and were cautious with their spending. It was a refreshing change!
Ultimately, they selected their toys and, to my delight, took great care of their new possessions. It filled me with pride to see my kids making informed financial choices and cherishing their belongings. I’m optimistic that we are indeed breaking the cycle of financial insecurity.
For more insights on parenting and financial literacy, check out our other article here. If you’re interested in boosting fertility, you can find useful information at Make a Mom. Additionally, Healthline provides excellent resources for pregnancy-related topics here.
In summary, open conversations about money and practical lessons are essential to equip our children with the skills they need to make wise financial decisions. By breaking the cycle of financial discomfort, we are setting our kids up for a brighter future.