How and Why I Give My Kids Allowance {Part 1}

My little Blonde Warrior just turned five! Although every birthday brings a level of excitement, in our house, number five has the added benefits of...

1. being able to invite friends over for a themed birthday party with games
2. getting to sign up for summer sports teams
3. being able to chew gum
4. GETTING A WEEKLY ALLOWANCE

The Hubs and I have a great method to our madness for each of these four "rights of passage". But, as our little man was just awarded his very first handful of coins Today, I thought I'd take a few days to share a little bit about HOW and WHY we choose to give allowance in our home.

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Today, let's start with the HOW.

You must be five years old.

By this time in their education (kindergarten), all my children have learned the value of each coin and how to skip count, the skill necessary to count change. Awarding allowance before they have this head knowledge would be futile.

Allowance is given out in dimes.

Currently, each one of my five-and-up children is awarded $1 a week. This money is given in dimes because dimes make it very easy to see monetary percentages. Scripture teaches that everyone should give at least 10% of their "first-fruits" to the Lord. Ten percent of a dollar is easy to calculate when the dollar is in increments of 10. One dime automatically goes to the Lord.

In addition, we insist that the children set aside 40% for savings. For these elementary years, we do not define savings as a very long term goal. While saving for college is commendable, I don't think it provides a tangible lesson for the rewards of "saving for a larger item" to a young child. At this age, it is kind of an unattainable and unrealistic goal. Instead, we encourage our children to choose a more expensive item on their wish list (usually $20 or more) and set aside their $.40 each week until they have reached their target price.

The remaining 50% (or $.50) is allocated as "spending" in order to buy smaller items that they desire right now, like gum or baseball cards. We typically do not allow them to put this spending money towards their savings goal as we want them to learn how to "release" money. We have no desire for the "love of money" (or their pre-selected savings goal) to turn them into money hoarders. Learning to spend money wisely is just as important as learning to save money wisely.

A "give, save, spend" bank is awarded.

Although each of my kids has had a few unique money banks over the last few years, my personal preference and the bank that I think has been the most helpful was the Money Savvy Pig. Unfortunately, he took quite a tumble down our steps and didn't fair too well.

Fun Treats from Mom and Dad don't come as often.

Once our children have their own money to spend, we expect them to buy their "wants".  (I'll expound on this when I discuss the WHY of allowance on Thursday.)  We, obviously, purchase fun "wish list" items at Christmas and birthdays.  But, for the most part, other than these few select special occasions, once they begin receiving an allowance, we rarely buy any toy-type items for our older children.

Money Matters becomes a topic of discussion.

When our children are old enough to be awarded an allowance, we feel that they are old enough to learn God's view of money and how He expects them to steward it. We want them to understand that all of our money, and theirs, is ultimately God's. Part of their "financial" training comes in hands-on experience at store counters as they are expected to be able to count out their money and check for correct change. And some of it comes in meaningful conversations and transparent examples of how the Hubs and I spend our money. Because, in the end, our bank record...or money trail...shows our life priorities. We want our children to see that God and His Kingdom are a priority to us...even in how we spend or save our money. At times, we have used the help of great resources like The ABC's of Handling Money God's Way.

We do not award allowance based on chores or work completed.

Huh?! "But doesn't the Bible clearly teach that if a man does not work, he should not eat?" you ask. Absolutely! This is why we have intentionally built in a few household habits that enforce this principle. While we do wish to teach our children a good work ethic and the principle of earning a living, the Hubs and I do not feel like an allowance is a proper outlet for that. The fact of the matter is, we expect our children to do household chores, not because they will be rewarded monetarily (bribed), but because we all live in this house and we all have to do our part to help it function. Doing work with little to no reward is a part of life. If I only made a meal when I was rewarded for doing so, my entire household would starve.

I desire for my children to have a servant's heart...to think of others' interests ahead of their own, as stated in our house rules. Home is the perfect training ground for that character quality. And do you know what? I've already seen the fruits of what this kind of character quality looks like in relation to chores. My daughter has such a wonderful servant's heart and willingly helps out around the house every day and in every way. And my boys love to help each other finish chores. My oldest son, especially, has developed an attitude of service. He often cleans up the entire boys' room so that his younger brothers don't have to. Don't get me wrong, my kids are not saints, by any means. They are just regular kids with sinful natures, but who have begun to follow after Christ's example of loving your neighbor (or family member) as yourself regardless of "what's in it for me."

In addition to desiring our children to have an attitude of service, the Hubs and I also recognize that there will come a time...several years from now...that our measly allowance is not necessary to our children. Our teenagers will most likely have after-school jobs and will be earning small incomes. If we award allowance solely on whether our children have completed a list of chores, what will happen when they realize that our few dollars are dispensable...when they see the income they are earning flipping hamburgers or bagging groceries far surpasses the few dollars that we can afford to give them for making their bed or doing the dishes? Doesn't it seem likely that our financially savvy teens will just decide NOT to do their chores anymore...because who really needs one or two dollars a week when you are already making five or six dollars an hour down the street?!

We provide an opportunity for earned "income".

The Hubs and I feel that we have assigned age-appropriate chores to each of our four oldest children. As I mentioned, these are to be done with a happy spirit and without compensation. That being said, we do occasionally provide opportunities for our children to do an "above and beyond" task with the hope of earning a wage, especially if we know that they are saving up for an item that is quite expensive. We want them to physically see how hard work brings reward and that "work" is not a bad thing, contrary to what the World would have them believe. Work is a blessing from God and comes with a multitude of benefits.

My oldest son experienced this first-hand one day last summer. The Hubs told the three older children that they each could have an opportunity to earn some money by doing an extensive yard work project that afternoon. Two of the three chose to pass as they were enraptured with a new toy one of them had recently received. But, Super Boy, always wanting to be glued to his dad's side, eagerly jumped at the chance to work alongside the Hubs. After toiling for well over an hour, my boy held out his hand expecting to receive his share of the wage. But instead, was rewarded with his brother's and sister's share as well. Since he, alone, did all the work, he, alone, earned all the money. After pondering this for a moment, he turned to the Hubs and said, "Dad, it's just like in The Little Red Hen story! She did all the work, so she got to eat all the bread!" Life-lesson learned!

So, if we do not give an allowance to reward our children for chores completed, why do we give an allowance?....

Check out Part 2, for the answer to that very question.