Get Your Kids To Give You Their Allowance Back

Savvy Lessons: children allowance, childrens allownce, children and allowances, children allowance rates, childrens chore allowance, teaching money to children, family budgeting, money tips, frugal living, chores, household jobs, creative ideas for allowances, buy back box, privileges, parenting tips, raising children, raising responsible children, raising teenagers, raising thrify children.

Mrs. Savvy Redhead, May 2009

When our kids came to the age of receiving an allowance, we had to double check our “allowance paradigm.”  We wanted to teach our children money management, but didn’t want them to feel they were being paid to do a job that we felt came with the privilege of being a family member like making their bed, setting the table, and taking out the garbage.  Since my husband is paid on a commission basis we decided to apply that system to our children’s allowance.  We decided to shift the “allowance paradigm” that most families have as a right of the child and extend it to an earned privelege based on the "get paid for your efforts system."

First, we clarified the difference between a chore and a job.  We then tackled the challenge of deciding what a reasonable “base pay” would be along with the pay scale for certain jobs done for bonus pay.  Finally we then decided on rewards and ways to teach them money management.  This system has worked well for us and believe it or not, we get things done around our home and with a positive attitude most of the time.  I should insert here that by the time they are 12 we stop allowance completely and they are responsible for finding odd end jobs or fostering saving habits to pay for their extra expenses and some of the “jobs” get turned into chores for older children.

The difference between a chore and a job was not as difficult as it may sound.  We wanted our kids to realize that living in a home with a family is a unit of cooperation and everyone doing their share so we outlined several chores that were to be done on a daily basis.  This taught them skills they would later take with them in their adult lives.  So chores were things like make your bed, brush your teeth, clean the floor of your room, put away your clothes on laundry day, simple cleaning of the bathrooms, setting and clearing the dinner table, load the dishwasher (unloading is left to me after the breakage of many dishes- probably a plot of the kids no doubt!), feeding the pets, cleaning the bathroom, taking out the trash.  Jobs were then categorized as tasks a little harder to do that would earn them extra money.  These were things like yard work, washing vehicles, vacuuming, dusting, bathing pet, loads of laundry, deep cleaning jobs and other tasks we could think of as they came up.  These items were put on a master list with a dollar amount and frequency maximum per pay period was assigned to each item.  The frequency maximum is to save you, the parent,  money.  We have a son who is a master mind and would bathe the dog everyday for an extra $5 each time if we let him- the poor thing would be bald in a week!   The list was put in a place all could see.

We then tackled the challenge of assigning an appropriate dollar amount to give the children to learn money management.  We decided that $1 per year of age per month would suffice.  This means that if your child is 5 years old, she would receive $5 a month.  This may not seem like a lot of money, but come on, we are teaching money management not super spending. Remember, there is a list of jobs to choose from for extra earning of money.  We  have our children Tithe 10% and save 20%.  The rest is theirs to spend freely.  So if a child gets $5, then she tithes $.50 and saves $1.  She then she has $3.50 to freely spend.

 Now we want to give our children rewards for their efforts so they got a base pay per month and then any jobs they elected to do on a weekly basis they got paid for as well.  This is where it gets “Savvy”!  I figured out how to rotate some/most of the same money I was giving them!  I had a buying box.  In this box, I put age appropriate items that I didn’t mind if they bought, school supplies, and special coupons.  These coupons are for special privileges they can buy.  Things like extra 15 or 30 minutes of computer time, watch a video, have a friend over, dessert out with Mom or Dad, music downloads, and movie tickets, make your own pizza night, etc.  I instituted the rule that when they left for school, anything left out where it did not belong gets put in the buying box as well.   Everything is given a monetary value and the kids could buy it back on Friday which was “Buying day”.  If they left out something they needed before buying day, they just had to wait until then- I believe in natural consequences and this is one of the inconveniences of lack of responsibility.   Their possessions stay in the box for a month maximum, after that if they don’t buy it back it must not be important so it is given to Goodwill.  Of course, the kids always have the freedom to spend their money as they wish.

 This system accomplishes several things, I am able to teach them to work and get rewarded/paid for their efforts of work, to save and tithe, buy things for their entertainment and of course  learn to pick up after themselves.  This system also allows me to save money as when they buy from me, I put it in a jar and when allowance time comes back around, I give them the same money again! 

I can say that now my boys are teenagers, it seems to have worked to some degree.  While one is a penny pincher and the other a huger spender, they both understand that they have to earn the money themselves, rather than expect us to give it to them. It is not ucommon for them to come rushing in to us now asking for any job that can earn them some money to go to the movies with friends.  We love this, because we can now get them to do job that we have been putting off ourselves, like wiping down the baseboards in the house.

That’s it!  Determine chores from jobs, allowance amount, and the rewards.  Put it in place, watch how it can work and come over to the good side of the savvy life.