Well let’s start with at what age we should start giving our kids an allowance. It is really a personal preference. There is a survey on About.com:Pediatrics and it looks like I fall in one of the majorities. I started giving the boy an allowance around age 7. He received $2 a week that year and it went up by $1 a week on each birthday until he was 10 years old. On his tenth birthday he started getting a monthly “paycheck” complete with a paystub that showed gross pay, deductions and net pay. That is when he opened a new savings account as well and started saving 10% from every “paycheck.” He also started placing 10% in the offering plate at church.
The paystub has been a great teaching tool. He sees that he has to help pay for satellite TV and internet service from his money since it is mostly for his benefit that those bills exist. He also sees a note on the paystub that lists other things adults have to pay like income tax, Medicare, house mortgage or rent, groceries, electric, etc. Now he better understands why every other paycheck Mom is broke before the check ever hits my checking account.
Having his own money each month to cover all his random expenses like cafeteria money, movies, games, DVDs, movie rentals, sodas and candy when we are out and about allows him to make better choices. He never had a problem asking for something every time we left the house when I was paying for everything. Now that it comes out of his wallet he seems to spend much less.
So giving kids money responsibility is a great life lesson. If they don’t learn to manage their money while they are still living at home, college days are going to be a very rude awakening. By the way, the boys gross “paycheck” is $130. The net is usually around $67 and by the time he puts money towards savings and tithes, he has about $42 each month to spend as he needs/wants to. He has become very good at saving it up for Christmas and vacations. He has also found a new interest in peanut butter sandwiches from home for lunch.
Take some time to sit down and come up with an allowance plan for your kids. You might be very pleasantly surprised at how smart they can be with their own money. Send me an email and let me know of your successes and failures so others can learn from your trials and errors.
You can send emails to email@example.com. I look forward to hearing from you.