Anna has been begging for some time now to get an allowance. I just haven't been quite ready to go there. However, this is something that her daddy feels very strongly about--that we teach her financial responsibility. Will and I have had a lot of discussions and have done some research. We were trying to answer the questions: Should allowance be tied to chores? How much is an appropriate allowance for a five-year-old? How exactly are we going to teach her about the responsibilities that go along with an allowance? These are tough questions to iron out and it took some time.
When I was little, I specifically remember making allowance boxes out of old shoe boxes divided into thirds for church, savings, and spending. We went off that concept so I was super excited to find this PINK box at Michael's divided into thirds (very important that it was pink). A few stickers later, and I had Anna's money box!
After consulting friends, family, and some online resources, Will and I ultimately concluded that allowance should NOT be tied to chores. Everyone is an integral member of our family and there are certain things that are needed from each member in order for things to function and run smoothly. Right now, Anna clears her plate and cup from the table after meals, helps to clean up various areas of the house when necessary, and puts her clothes away. These things will change as the kids get older and are able to do more, but they are required as part of the family "team" and should be done out of a willingness to contribute to the team, not for merely financial reasons.
As far as the amount questions goes, I kept reading that $1 per age of the child was appropriate. At first I thought this was a lot! $5 a week!! Yikes! I remember getting quarters for allowance! Then I read something that spoke to me (and I paraphrase): The amount you give your child for allowance should make you a little bit uncomfortable. Only then will they learn the valuable lessons associated with money. Wow! That's what I was feeling--I was a little uncomfortable with $5 a week. But that would be an amazing opportunity for her to learn early about money responsibilities with us here to help her.
So, we started giving her five $1 bills every Sunday. She puts one in church, one in savings, and three in spend. We were proud of her because she didn't want to go out and blow her first $3. We explained how she would have $6 and then $9 if she waited for several weeks. And she did! She waited until she had $12 and then begged us to go to Toys R Us to spend her allowance. She said she wanted a Lalaloopsy doll. I knew they would probably be more than $12, so I prepped her that she could go look but may have to wait longer. We talked about spur-of-the-moment spending and buyer's remorse (not in those exact terms, obviously). She seemed to get it.
Of course we got there and the doll she wanted was $22. I explained to her how much longer she would have to wait to save up that much. Then she decided she would look around and see what else she liked. She found the mini Lalaloopsy dolls and discovered she could get two of those with her $12. Sold! She was so proud handing over that money to the sales associate at the cash register.
Now she's starting at zero again in the spend part of the box. But she certainly doesn't forget about allowance come Sunday! Here's to lots of years of successful financial training!
