Teaching Children About Money and Budgeting

Discussion in 'Early Childhood Archives' started by tiredmommy, Aug 12, 2005.

  1. tiredmommy

    tiredmommy Well-Known Member

    I'm considering letting Duckie earn an allowance. I know she's young, but she's been doing well with doing chores to earn a specific item, so I thought I may as well jump in with both feet and have a regular allowance. Does anyone know the going rate for allowances? I'm leaning toward $4 a week ($1 for each birthday). I'd be interested in what other parents have tried, what works & what didn't.
  2. pigless

    pigless New Member

    tm, I have no idea what the going rate is. I decided on $1/year of age/month. Mine only get a monthly allowance, because I refuse to spend an hour at the dollar store every week.

    When I tried the weekly allowance, Skip talked about going to spend his loot every single day and drove me batty.
  3. SRL

    SRL Active Member

    At age 4 I like a dime or quarter per job instead of a weekly allowance. $4 a week is a huge amount of money for a child of that age.
  4. tiredmommy

    tiredmommy Well-Known Member

    Thanks Pigless & SRL. I'm hoping to get her to save up for some of the stuff she wants. I've got to balance getting her to put in an effort, yet not make the so far out that it seems unattainable to her.
    Here's what she's been doing:
    Everyday- picking up & putting away her toys. This is at least twice a day if we're at home or before dinner at the latest. She also feeds our three cats in the morning. She makes sure her dirty clothes get into the hamper.
    Mon/Wed/Fri- Dusting her room. I use the term "dusting" loosely, lol!
    Wed- Help husband or myself take our trashcans to the curb.
    Thurs- Help with bringing trashcans back to the garage.
    I'm also thinking of having her set the table at least a few nights a week.
    Any thoughts? Does this seem like too little or too much?
  5. pigless

    pigless New Member

    She feeds the cats!

    Mine have no interest in feeding the cat, but they are feeding the fish that we recently acquired.

    Mine have to do toy round-up
    fold the rag towels
    Skip has to put his dirty clothes in the laundry bag
    other assorted tasks as requested
  6. Trying

    Trying New Member

    I agree with SRL - but probably because our difficult child can't understand delayed rewards. We give her a nickel or a quarter or even a penny, that she can see us put in a cup, or in her purse. She can understand that. Also she likes stars on her chart or points that she sees us write down on a marker board. I think she likes the process more than the prizes!

    Good luck!
  7. LovingAbbey

    LovingAbbey New Member

    Does Duckie understand the value of money? My difficult child is so much happier to get 4 quarters than a dollar bill. She doesn't truly get the difference between $1 $5 $20 yet, it's all just money to her. The one time she stole money from me, it was a 20 to get a soda out of a vending machine at the YMCA (cuz I won't allow her to have soda)! LOL! Imagine all the change she would have gotten back if she pulled that off!! And difficult child values quarters because she knows that 1 Quarter = a gum ball or a small prize out of the machines at the grocery store if she does a good job of behaving and helping out while in the store. That is her reward. It's a small price for me to pay to have a peaceful shopping trip and she gets in some heavy work the Occupational Therapist (OT) suggests.

    So while I see your logic in the saving for toys, maybe it might make more sense if it means something to Ducky as well. If she likes change then go with that, but at this age it doesn't have to make a whole lot of sense to you, and it doesn't have to add up to a lot either.

    PS. Right now, your paying her $208 a year at 4, this could get pricey! oh yeah, and bravo for getting her to do so much!! I wish I could get Abbey to do more, she only goes on random cleaning sprees and then is done for a week or too!! But she'll clean anyone else's house except ours! Good for you!

  8. tiredmommy

    tiredmommy Well-Known Member

    Our big problem isn't the amount of money so much as the continual quest for new stuff. There's always a new toy or dvd she wants. She likes dollar store stuff well enough, but really wants the more expensive stuff: Barbie, Barney, Kidz Bop, etc. I'd like for her to learn how hard she's going to have to work to get more new stuff. I used to be able to reward her with that special toy, but it's wearing thin.
  9. LovingAbbey

    LovingAbbey New Member

    I thought of an idea that might be more age appropriate, that might solve the wanting new stuff problem, while giving her a reward for her hard work. Just an idea though...

    What if you used sticker charts as tokens. Perhaps a certain number of stickers (representing all daily tasks completed) on a chart will equal one new toy or DVD. That would be something she can see. I don't know if you were planning on letting her hold her own money to save, but I know my difficult child can't keep track of anything. But this would be a safe way for her to earn the money but not have it be focused on money but more on a goal. So even if you went with that much money, she needs say 20 stickers to be able to buy something new. That would be about 3 weeks or 12 dollars. And if you made charts that were only in three week increments then she could see the goal and maybe pick it out and cut out a picture ahead of time to put at the end. As she got older the value of the money would become more real too and the stickers less necessary.

    I only shop sales and discount department stores so $12 is plenty for a barbie or a movie but you may need to adjust depending, and if she wanted something bigger than she would have to save up two of the sticker sheets or whatever.

    Just something I thought of that might work for you, since the cleaning is already working so well. The sticker chart is really only for her to track her work to cash in to get to her prize, not as a traditional behavior mod tool.

  10. tiredmommy

    tiredmommy Well-Known Member

    Thanks! That's a great idea!!!
  11. Fubar5

    Fubar5 New Member

    We have started Gabe on an allowance a few months back.
    He had a cockatiel he loved very much, but due to his youthful outlook on life, he thought birds and dogs could be friends. Horrible it was, poor thing was crunched right out of difficult child's hand! :panic: Sooo, after the shock and proper morning period, he asked about getting another bird in the future. We set him up with two easier chores to keep up with and he gets $3 a week. He's five, but his big brother doesn't get much for his chores and would have a cow if Gabe got much more than that $3. LOL!
    Gabe is well on his way to other bird, though he has decided to upgrade to a larger bird. Which is good, it will take longer and he will have more maturity under his belt. Maybe by larger he means "condor like" and the dog will mind it's Ps and Qs!
    Working for their $ is something more kids need to experience. Best of luck!
  12. wakeupcall

    wakeupcall Well-Known Member

    I think it's wonderful that all of you can have your children do chores. My son would never, ever get an allowance. I can't get him to do a single thing without feeling like the walls were falling down. He's so obstinate that I decided to not have chores as one of our battles. I know, he's not learning much, but for my own sanity.....well.....I'd rather do it myself.
  13. NikkiKay

    NikkiKay New Member


    I really like the idea of the sticker chart. I tried it with my kids and it worked pretty well. We stopped doing it when they were giving me trouble going to bed.
  14. tiredmommy

    tiredmommy Well-Known Member

    Don't worry about chores/allowance stuff yet. It's got to be a basket C until other things are under control. What's the point if it just brings a meltdown? Now Duckie's motivated for the allowance, by greed! :rolleyes: That's truly the only way I'm getting her to comply. She's not doing one thing out of the goodness of her heart.

  15. GoneNsane

    GoneNsane New Member

    My kids get an allowance of a dollar a week, if and only if they have their rooms clean at the end of the week and have not had any real terrible behavior. We are big into thrift shopping and garage sales, so the kids find plenty to buy with a dollar. They are expected to put their toys in their rooms at the end of each day and put their own dishes in the sink, but they don't get monetary compensation for that.

  16. Martie

    Martie Moderator


    There have been long posts on this topic in General over the years (but I don't know whether or not they made the Archives)

    I think you should stick with money (not stickers) for the following reason: Duckie is very smart and if she has already made the abstract connection between money and buying "things" then it is time to move on to bigger and better rewards which means SAVING.

    (I lurk on this board because I find it interesting but really, what do you need with someone whose kids are 18 and 20???--but seriously, there are a few things I remember clearly, some I would do the same way and some I would not--this is one I would do the same way--so occasionally I post something I hope is useful to someone.)

    The goals of all this work and allowance stuff is to create financially responsible young adults and in my opinion--it's never too early to start. If you give kids money for each chore completed or money in a grocery store, you are creating an "instant gratifier" in my opinion. The the kid spends the quarters on "junk" and you end up buying the Barbies anyway

    Back to Duckie:

    Here is what I would do because it directly links money to the items desired. First determine what she wants (one "big" item) and then determine the cost. Make a chart with a picture of the item and a picture of the money needed (I did this when I could just write 12 dollars) but you could photocopy a dollar, reduce it and put 12 on a chart or just write the number 12 and put one picture and put an envelope underneath. For very concrete kids, a baggie is good because they can see the $$.

    THEN--and this is the saving part, teach her that 4 quarters = one dollar. So if you want to give her a quarter because she did something extra or whatever, fine. Put the quarters in a glass jar next to the chart (with a slit in the lid.) Allow the child to take out quarters to buy small stuff but every time there are 4 or more quarters, ask her if she would like a dollar for her savings for X. This is the only way I have found to get kids to realize that today's small expenditures cut into future large purchases.

    I have to say that both my kids are good money managers and although they may buy more "little stuff"--mostly unnecessary food in restaurants with friends than I want, they are fully aware that those types of expeditures undermine long-term savings goals. In addition to whatever they think they "need" they are required to contribute to college tuition so they have a lot of potential conflict between easy short term gratification and long term savings. Ex-difficult child recently figured out that his tuition contributions are going to make a car unrealistic for four years--o well--a car is unrealistic in NYC anyway but I was glad he could figure out that it was monetarily unrealistic rather than my just telling him, "no one has a car in NYC."

    So I beleive that coverting to a currency system as early as possible and teaching equivalent money values is very important.

    Another imprtant concept is saying, "NO" when the child begs in stores. I used to ask my kids before they went to the store with me (a situation I tried to avoid, I admit) if they wanted to take any of "their" money from the jar. Ex-difficult child caught on sooo quickly that if he took two quarters to the store, he was delaying getting whatever was on the chart.

    Finally, when kids get older, they want/need things that would take them too long to earn unless you want to pay them a very high amount of money for chores or have them wait 5 years. Enter the negotiation phase of splitting by matching funds: I will contribute 2 dollars to every one they save toward a whatever, a CD player, incredibly expensive gym shoes, etc. Obviously, I could contribute 3 dollars and so on--depended on how much I thought the item was a real need vs a passing fancy.

    In addition to chores, I think that kids should have money just for existing if the family can afford it. It then becomes the child's decision whether to put this money in the jar (spending) or in the envelop on the chart--saving. I tried to encourage them to save some of their allowance but didn't insist--it was their money. The "free" allowance was set at a dollar per year of age per week but I may be hopelessly out of date (since I stopped paying easy child an allowance 8 years ago at age 12) because I discontinued the 'free' allowance AS SOON AS they could earn money on their own. Then they switched from envelopes to bank accounts (actually they still used the envelopes and then put the money in the bank at intervals.) This part of the system only works if the child can earn more than the free allowance. For both my kids, this happened, probably because I didn't ever give them allowances as big as their friends so they had motivation to work.

    If you keep the long-term goal in mind, I think you will see why some sort of "spending account" and a "savings account" is very helpful.

  17. tiredmommy

    tiredmommy Well-Known Member

    What an incredibly well thought out plan! I'd love to see this archived so that others can refer back to the ideas in this post!
  18. LovingAbbey

    LovingAbbey New Member

    I know Martie, this is a very well thought out plan!! Wow! I'd also love to be able to refer back to this so when my difficult child finally gets to the point were she can consistantly complete chores I would be able use this with her. This is a great plan that accompishes so much! Thanks for sharing it with us!!

  19. DammitJanet

    DammitJanet Well-Known Member

    Marties idea is basically the idea we used when the boys were small except we used fake dollars for the savings. We cut out construction paper and put their names on them. Nowadays you can easily use the computer to make Duckie bucks. This leads to having siblings not being able to swipe another childs money...or the kid not losing the money.

    Poker chips got swiped in our family.

    But we did the charts on the wall with how much chores were worth, we paid with jamie bucks, when they wanted a certain item at the store and had enough "bucks" they could trade in at the bank of MOM and Dad...to buy the item.