When I was just 10 years old, I clearly remember some of the responsibilities I had at home. I was the oldest of four, and being the old soul I am, probably tried to act even older than that. With my age and maturity apparently came a pretty good chore list.

I had plenty of normal chores like helping clean the kitchen and cleaning my room but I also was given responsibility for doing my laundry – and the laundry for the rest of my family by age 12. I remember sorting darks/colors/white in the basement next to the cold dark utility sink. I wasn’t a fan of that side of the basement. What kid is? But with these chores, especially the beast that was our weekly laundry, came my allowance. Besides some back to school clothes, any other spending money I needed was mostly up to me. Whether it was going to the movies with a friend, buying a new shirt or a new cd, I had to decide what to save and spend money on. I didn’t have a fancy little bank but I remember the envelope I kept my money in…inside my caboodle of course.

My parents gave me this allowance along with the responsibility and freedom to choose how and what to spend it on. I vividly recall a family trip where that freedom found its limits. We were on our way to a local amusement park and I had brought all $10 of my money with me. Before we went to the park, we stopped by a fall market. I got to bring a friend along on the trip and as we were looking at all the goodies, we decided it would be a great idea if we used the money to buy some delicious Halloween candy – there was a chocolate witch sucker that was just calling my name. Turns out, we spent ALL of our money on the candy. Oops. My friend and I headed back to find my parents after making the purchase, and when my mom learned what I did, she just about lost it. Okay, she lost it. She was soooo mad at me for that decision to spend all of my money on candy before we had even made it to the park. The poor cashier also heard all about it – I mean why in the world would they allow this ten-year-old to buy $10 worth of candy with no parent around?? That may be the day I learned not to be so spontaneous in my spending. (chuckle)

Fast forward to today as we raise our kids. Our daughter in now six years old and my husband and I often discuss what the best approach is for our oldest. Shortly after we changed our financial system to follow the Financial Peace plan, we both read the book Smart Money, Smart Kids. I’d say it was an easy and quick read and mostly reaffirmed the discussions we had already started to discuss. If you’re looking for some ideas, I’d recommend this book.

So what is it we do? Do we give our daughter an allowance? Does she have responsibility for our family of five’s laundry? (insert another chuckle). No, our method isn’t super formulaic, but here are 5 ideas that work for us.

1. Understanding how to Save, Spend and Give. We started this when she was just four years old which may be young but we’ve continued to build on this concept. We don’t have a hard and fast rule on what money goes in each which is a little different than how I’ve heard others use it. Some have their kids split the money they make or receive evenly among the three accounts all the time which is what I initially thought we’d do. But instead we’ve really just talked about the three accounts regularly and talk about them again each time she has new money to put away. We suggest what she could do with the money but ultimately leave the decision up to her:

  • SPEND – This money is used for more impulse purchases, like when she “needs” a new chapstick, something from Target’s dollar section or maybe realllllly wants a cake pop at Starbucks.
  • SAVE – She puts money away in this bank even if she doesn’t currently have a savings goal. So far she’s had three larger things she’s saved up for including a book that was about $8, a $30 horse from Build-a-Bear and most recently a Wellie Wisher American Girls doll which totaled $65.
  • GIVE – This is money she typically brings to church during offertory or to light a candle afterwards. We explain this money helps our church help others in need. During Christmas time, she also really likes to use it for the Salvation Army red buckets. And every once in a while she thinks of something she wants to buy for others, a friend or family member for example. As long as it’s not just something silly, but something I can tell she’s being really thoughtful about we allow her to use giving money for this, too.
  • In terms of where she physically puts her money, I found this really cute bank on Amazon that friends use but instead, we ended up just going to the local dollar spot and grabbing three fun, colorful water bottles that she labeled herself. Whether you buy something or make it, my suggestion is to have a bank that’s transparent so your kids can see what’s inside each.

2. Let them earn it. So far we’ve stayed away from giving an allowance and instead, allow our daughter to earn money. There are certain chores we’ve decided she has to do that don’t earn her money and are just a contribution to working together as a family. These chores include:

  • Feeding the dog
  • Helping set the dinner table
  • Putting away silverware from the dishwasher
  • Cleaning up her toys each day
  • Keeping her room tidy

To earn money, she can:

  • Clean the basement (where most of the toy mess is)
  • Help fold/put away laundry
  • Help while we wash the floors, dust the house or clean the bathrooms
  • Help rake, shovel or other yardwork
  • Collect the garbage from upstairs for garbage day
  • Do a “deep” cleaning of her room
  • Provide another suggestion

We pay $0.50-$1 for each of these chores depending on the size of the job.

3. Creativity to earn more. As I mentioned earlier, there’s been a few times she wanted to earn more money for something she was saving for or because she wanted to help give money to an organization that our family was giving to. About a month ago she asked if she could do a cupcake sale to finish saving for her American Girl doll. I agreed and she worked really hard to make it happen! Thanks to friends and family, we made 10 dozen cupcakes and she passed her goal! Other times, she’s organized a lemonade stand to help raise money for things like the epilepsy foundation in honor of her little sister, our local zoo and most recently, Give Kids the World – a special place we got to stay on our family’s Make a Wish trip.

4. Saving for an attainable goal. I’ve heard of others having their kids’ save banks meant to save for a car or for college some day. I think there’s a time and place for that, but at age six I don’t think she can fully grasp that concept. If you have a child that’s really interested in saving for those now, that’s awesome but I think we’ll probably work with her on those goals as she gets into her preteen years. Personally, I love the idea that she can save for something and see that it’s possible to reach her goal in a reasonable amount of time. This should help her better understand how money works and have an appreciation for it in the long term.

5. Include them in the budget conversation. No, I don’t mean that we make her sit down in some formal meeting and listen to how much the water bill is or what medical expense we have coming up but we do talk about our monthly budget at the dinner table or sitting in the family room and she hears it. We also ask her if there’s something she wants to include in the budget (or more often than not, if she asks for something randomly in the middle of the month and we haven’t accounted for it, we let her know to remind us the next time we talk about the budget.) Things she may get added to the budget could include a new learn-to-read book, a special trip she wants to take or even whether she wants to get a haircut or not the next month. Some of this will just come out of our entertainment category for the month but if it’s already been allocated she knows she can bring it up for the next month. If it’s something we’re doing as a family or a learning activity, we’ll include it but if it’s just a “want” such as a doll or stuffed animal, that’s when we let her choose whether she wants to save for it or not. I also think letting her hear about what we do with our money, helps her decide what she does with hers. I’ll often tell her I’m choosing not to do something or buy something because I want to use that money for something else instead. She knows I’m making choices and not just buying everything I like. She also hears us talk about where we are giving our money to help others or for a need close to our hearts which helps her consider how she can use her money to help others, too.

So there you have it – we don’t have a fancy chore chart or a weekly allowance. Our plan to raise our daughter as a saver, a giver and a responsible spender isn’t according to a specific formula, but in a way that we hope gives her the smarts to assess and understand money to use it for good.

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Hi there! I’m Erin and mom to three amazing kids and wife to the best husband around IMHO! We’re doing our best to find joy in our days and love in our hearts even when things are hard. Our middle daughter has a catastrophic form of epilepsy that affects every part of her life and ours. She’s taught us more than we could have ever learned about the importance of life, love and God. Our days aren’t anything glamorous, but I’ve learned to take time for the things I enjoy. As mom, wife, friend and just good ole’ me. I think it’s important for you to take care of yourself too – have fun, remember you’re amazing and be confident in what you wear, what you eat and what you feel. So here’s to you, here’s to us, and here’s to this amazing thing we get to do every day as momma!

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