allowance for kids

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Inside: If you are thinking about starting an allowance for kids, here are the best tips that helped us create a system that works!

Why can’t I have that toy right now?“, my son told me with an angry look on his face. “You said we have money and I want it!

We were at the mall buying stuff for our vacation and everything was going well until my son saw a toy he really liked. From that moment on, everything he could talk about was that toy. I couldn’t concentrate on anything else because of his loud protests, so I decided to sit with him on a bench and talk about the toy issue.

I never imagined that his protests would lead to a long conversation about money and the way we can spend them. I wanted him to know that I can’t use our vacation budget for toys because otherwise, I wouldn’t be able to buy everything we need. Also, I wanted him to understand that if we agreed not to buy toys during our trip to the mall we need to stick to our agreement.

Even if the situation started with him in a very angry mood, I was amazed to see how his mood changed when I started teaching him about money. He was genuinely interested in finding out about this topic, and he even had followup questions for me in the next days.

This conversation at the mall happened more than a year ago but I still can remember it clearly because it helped me understand that my son is ready to learn more about money. I strongly believe that teaching children about money management from an early age is very important and helpful for their future. Also, it helps prevent many power struggles about buying toys or other stuff they want, and teaches them to be more responsible and grateful for their possessions.

Allowance for kids: How to get started

It took me a very long time to decide on a good system to try with my son when it comes to allowance because I didn’t want to start with the wrong approach. So I took some time to read about the way parents can set an allowance for kids and transform it into a habit.

After testing the best ideas we discovered, I want to share with you the tips that worked great for us! Getting started with an allowance for your kids can bring great benefits to both you and your children, so I hope that these ideas will inspire you to try this!

allowance for kids

How much money should I give my kid for allowance?

I asked myself this question when I decided to offer my son an allowance, and I’m sure that many parents wonder about this as well. The best idea that I found and implemented in our home is offering the child one dollar per year of age every week or every other week.

My son is 5 years old now so we agreed on an allowance of $5 a week. He receives his allowance every Monday and keeps the money in a special box we decorated together.

Should kids get paid for chores?

This is another question that often pops up when it comes to setting an allowance for kids. After reading several opinions on this topic, we decided that we will not pay our child for regular chores or other things we ask him to do to help us around the house. Offering money for chores affects the child’s intrinsic motivation to help and contribute to the household tasks, and we didn’t want this to happen.

Still, we wanted to offer our son the possibility to earn more money if he has a specific goal he wants to reach (e.g. buying a more expensive toy). So we decided that he can earn additional money by doing one of these two things:

  • selling some of his gently used toys – He decides if he is ready to let go of one of his toys and sell it, and I tell him how much money he could get for it. If you want to try this idea, you can either encourage your child to participate at a garage sale and sell the toys themselves, or help them by selling the toys yourself and giving them the money. Sometimes I decide to donate the toys and I pay him with my money to offer him the chance to practice this more often. (He also donates toys to charity a few times a year without receiving any money to learn about the importance of helping others. But we also encourage him to sell toys from time to time to get used to letting go of things, and get more money for his goals.)
  • helping us with some “special projects” around the house – My husband came up with this idea and my son liked it! While we don’t offer money for regular chores, sometimes we have “special projects” to do in our home and we give our son the opportunity to get involved and earn some money. For example, some months ago my husband planted some herbs and vegetables on the terrace and invited B. to work on the whole project in exchange for a few dollars.

allowance for kids

Allowance for kids: The rules that helped us make this work

Here are some of the rules that we follow when it comes to the allowance we offer to our child:

  • We never use allowance as a punishment or reward. I don’t believe in punishments and rewards in general, and this applies to allowance as well. I don’t want money to become a source of power struggles in our home because this is not the lesson I want my son to learn. The weekly allowance is an agreement we made as a family and we keep it every single week, no matter what else happens in the meantime.
  • The child decides what to do with his money. He can use the money for whatever he wants: toys, special sweets, paid rides at amusement parks, and so on. I try to talk to him about his choices and he often asks for my opinion, but in the end, it is always his choice. At first, he used to spend all his money quickly, as soon as he saw something he liked. Then he learned the hard way that this habit was preventing him from buying more expensive toys that he really liked. This is how he learned the benefits of saving money and got better at resisting temptation. He still learns how to manage his money (and sometimes regrets his decisions)  but having the power to make choices on his own was very beneficial.
  • If he makes poor choices with his money, we don’t “save” him from the consequences. I clearly remember a trip to Target when he saw an awesome toy his best friend had (and he really wanted) and realized he doesn’t have money to buy it because he spent his savings on a bunch of useless things. It was a tough moment for him, and he started crying. My first instinct was to “save” the situation and buy the toy for him but I realized that this wouldn’t teach him any lesson. Instead, I empathized with him and helped him express his feelings. Then, I helped him made a plan for saving money in the next weeks so that he could buy that toy. He followed that plan and was able to buy the toys some weeks later, and he was so proud of himself!

The benefits we saw after offering our child an allowance

After implementing an allowance system in our home, I would recommend it to every parent! It is a great way to offer kids valuable lessons about money, and help them become more independent!

Here are some of the benefits we noticed since we got started with this:

  • our child is more responsible and learns to make better choices when it comes to spending his money (he still has a lot to learn but he made great progress in the last months)
  • we avoided almost all the nagging and negotiations in the stores (he knows that he can only buy things if he has money for them so we no longer have endless discussions about every toy he wants from the shelves)
  • our child is more grateful for what he has (I don’t want my child to become one of those entitled kids who believe they “deserve” everything and the allowance really helps him understand better the value of money and the privilege of having the toys he wants)
  • we have fewer toys (Spending his own money on toys helped our son realize that he doesn’t “need” all the toys that used to grab his attention in the past. He slowly learns to save money for high-quality toys instead of spending them on cheap and useless ones and this helps us reduce the number of toys in our home.)

I’m sure that we will learn a lot more and improve our approach as our son grows up, but for now, I’m very glad that we found a system that works for us! If you want to get started with offering an allowance to your kids, I hope that these ideas will help you make the best decisions for your family!

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If you are thinking about starting an allowance for kids, here are the best tips that helped us create a system that works! --- How to teach kids about money and create an allowance system for kids | Parenting tips #Parenting

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