Kids and Money (Chores / Allowance / Kid’s Finances)

My daughter is six years old. This week, I began the process of teaching her about money.

Background: My daughter can read. She can count. She can make change. She knows the difference between dimes, nickels, quarters, and pennies. She has some idea of the “value” of money. She is beginning to understand that you earn money by working for it.

What I am teaching her:
There are 3 things that you can do with money. Spend it, save it, or give it away. In our home,
we give 10 percent of our income to our local church. We will be teaching our children to do the same. (Yes, I am a psycho conservative Christian who believes in indoctrinating my children with old fashioned, out of date, Biblical values…:>) So, the breakdown for her monthly “salary” will be as such:

Spending Jar: 50 %
Savings Jar: 40 %
Giving Jar: 10 %

(To get started, we took the money that she already has, from birthdays and grandparents, and divided it into pennies, nickels, dimes, etc. Then, to teach her about percentages, we put 5 pennies into the spend jar, 4 pennies into the savings jar, and 1 penny into the giving jar. We did this with all of the various monies, thus achieving our 50/40/10 breakdown.)

I do not believe in allowance. I believe in a “salary” or income derived from actual work. So, our little girl will receive a “salary” every week. Here is a list of the “jobs” that she can do to earn her salary:

As you can see, some of these chores must be done daily (cleaning your room, folding clothes) and some are done weekly (cleaning the carport, vacuuming, etc.). Now, lest you think I am a cruel task master, I realize that my six year old is not really capable, as of right now, of vacuuming the whole house or cleaning the entire carport. These jobs are “helper” jobs, where we ask her to help Mommy and Daddy.

(The Bonus categories are for various jobs that come up during the week that we will ask her to do. This comes in handy when kids say, “But, it wasn’t on my list…”. Now, we have a place to add it. In fact, my daughter has already started to ask for “bonus” things to do. Examples are: put up dishes, gather up dirty clothes, feed pets, etc.)

As you can see, our daughter earns 1.00 per chore, per week, for a total of 10.00. She simply does the chore, checks it off, and gets Mommy or Daddy to verify that she has completed the chore. Then, every Friday, I will sit down with her and pay her for her jobs. We will then break her money down into her 3 jars.

How did I arrive at 10 dollars a week? Well, we have budget of 100 dollars a month for “Misc. Children’s Stuff”. So, I broke that down into 20 dollars a week. We have two kids, so that is roughly 10 dollars a week per kid. My son is only 2, and is not quite ready for his chore list. (Though, I will probably start him much earlier than I did my daughter. I think she was ready at about age 4, but I was too lazy to implement the system!)

What do they “use” their money for? Well, my daughter can spend her money on anything she wants, and can save for anything she wants. It’s hers. I will not interfere. I will make suggestions, and I will help her find deals, but I will let her “enjoy” the fruits of her labor. Right now, she’s spending her money on bubble gum and bracelets, and saving up for a “computer like Daddy’s.” Yay!!

Now, the reality is that I cannot afford to pay my daughter for EVERY single thing she does around the house. I am making it abundantly clear that there are some things that family members just DO because they love one another. I buy her clothes, buy her food, provide her shelter, and buy her presents because I love her. She will never, ever, ever, have to earn these things. The chores list is simply a bonus opportunity for her to earn spending money for things that she does not “have” to have.

Caveat: If you put a chore on the list, and the child does her very best to actually do the chore, you are not allowed to complain about the results. Don’t be a jerk about a few wrinkles in the bed spread or shoes on the wrong side of the closet. She’s SIX, loser. Remember, we are teaching responsibly AND building self-esteem. She will mature, not only from doing the actual work, but from receiving praise for her accomplishments. When she spends her money, it will be HER money, and she will associate hard work with reward.