Teaching My Kids How to Spend, Save & Give

This month marked the beginning of allowance in the Clark household. For years I have pondered and researched the approach that I believe would work best for our family. Should the kids earn their allowance through chores? Should they lose allowance for poor behavior? So many questions!! Money management is a discipline that takes time and practice to master. I want my girls to grow up with a good grasp of how to handle money. I believe it is my job to teach them how to save, make wise decisions when spending, and most of all, I want to teach them to be generous with what they have been given.

We have decided that we are going to use allowance as a learning tool for finances, and not tie it to chores or behavior, as recommended by Gail Vaz-Oxlade. Chores are connected to being a part of a family not for financial gain. I know this becomes a touchy subject so it is important to keep in mind that each family is different and will choose different approaches. That's okay! 

The Banker

Every Saturday morning after our weekend chores are complete (*future post), the Clark Family Bank is open for business. The girls each sit down with the banker (me) and I distribute their money. The amount doesn’t matter, do what works for your family; in our house we give $1 for every year of age, weekly. Together we break the money down into jars I found at Dollarama: one for Save, one for Spend and one for Give. 

Our Allowance Breakdown

10% tithe/give, 20% save and 70% spend (we round up as I don’t want to deal with dimes and nickels)

Sienna  –  9 years old = $9.00 ($1.00 Give, $2.00 Save, $6.00 Spend)

Hayden – 7 years old = $7.00 ($0.75 Give, $1.50 Save, $4.25 Spend)

Isabella – 5 years old = $5.00 ($0.50 Give, $1.00 Save, $3.50 Spend)

Lessons Learned

Since beginning allowance, I no longer buy random treats for the girls when we are out. I make it clear when we go into a store, what we are there to purchase. If they are in need of a new pair of jeans, I purchase the new pair of jeans. I am less tempted to purchase the random shirt that they “just have to have!!!”, even if “it matches the jeans perfectly!!” If they want to purchase the shirt we talk it through. “How much do you have?”  “How much does it cost?” “Do you have enough?” I have found that they are being more deliberate in their purchases and are seeing the value in how much items cost.

My daughter recently had a book with water damage that the library fined us for. She took that amount from her jar and was able to make amends, vowing she will take better care of books from now on. She understands now that there are monetary consequences for not taking care of her belongings.

We are only four weeks in, so I'm sure there is much to learn and tweaks we will make as the days and years pass on but, for now, these are some tips that I would recommend to make the most of allowance:

  1. Keep Change on Hand - I go to the bank bi-weekly and stock up on quarters, loonies, toonies and a couple bills
  2. Stay Consistent - If Saturdays are bank day, then Saturdays are bank day. 
  3. Have a "Give" Goal - Ex. Once we have $20 in our jar, we tithe.
  4. Open a Savings Account - Ex. We will make a deposit when we have $20 in the save jar.
  5. Don't Cave - If your child really wants something that is not a need but does not have enough money, make them wait. Share examples of times you wanted something but had to wait another month
  6. Lead by Example - If you want your child to be generous, be generous. Include them in decisions on how to bless others.
  7. Show Grace - Remember kids are naturally selfish. Take the opportunity to guide them in finances but allow them to make mistakes.