The subject of allowances and chores has come up on both an email list and several blogs I read recently so it’s been on my mind. Years ago when we were in our happy “we’d get pregnant any time now” phase (not realizing it would take 16 YEARS!) we had read the book Money Doesn’t Grow On Trees by Neale S. Godfrey and really liked the ideas she put forth. So we sort of had an idea in the back of our heads about allowance and teaching about spending and saving, but it’s been a long time since I’d read it so I went ahead and reread it (new updated edition!).

She proposes giving an allowance based on the child’s age per week and then a 4 jar system of using/saving that money: charity of the child’s choice 10%, long term savings 30%, short term savings 30%, and spending money 30%. She recommends using actual see through containers at first so the child can see the savings grow and of course exact change so you can split your child’s allowance up into the jars.

The book has a lot of games for learning about money, how to be a wise consumer, how to set up a budget, and how to eventually get your teen to manage all their own money so that by the time they’re ready to leave home they are money wise. I highly recommend this book.

So, is this how we are going to be doing MBS allowance? Sort of. She feels strongly that the allowance should be based on chores, that it should be money earned and we differ there. When she talks about chores she does share some of the same ideas as me that some chores you do because you’re a “citizen of the household” and you don’t get paid for those. While other chores have an amount attached to them. I am kinda with her on all of that, I agree some chores you just do because you’re a part of a family and these jobs need to get done for life to move smoothly, while other jobs you get a special bonus for. I just disagree that the “allowance” is tied to chores.

I think of MBS’s allowance the same as my spending money, Ryan doesn’t take away my latte and  ebook cash because I didn’t get the laundry put away (my dreaded chore). I don’t stop Ryan from buying new books because I had to take out the trash and recycling. Spending money is just that, spending money. It’s each family members share of the household budget. Now, sometimes the unexpected comes up and the budget is tight and I don’t have money for lattes because of it. I think that’s a good lesson for a child. Telling MBS that “the dog got sick and we have a large vet bill so everyone is cutting back on extras this month to help pay for it”. I think that helps him understand about being a part of the family, that everyone gives and everyone takes, everyone works and everyone benefits.

So we are doing an allowance based on MBS’s age per week, for now it is all going into long term savings, when he starts becoming more money aware we’ll start the 4 jar system.

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