Thursday, April 15, 2010

Allowance Money

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So Big Brother now has an allowance, and today is his first payday.

Okay, so maybe his payday looks a tad more like this.

I think this is an interesting and important topic, and I'll be interested to hear your thoughts.

To put things in perspective: Big Brother is currently 5 (closer to 5 than 6) and in preschool.

His allowance will be $2 per week.

In order to "earn" his allowance, he is expected to make his bed daily (which he's getting pretty good at), put all of his dirty laundry in his hamper, and be otherwise generally helpful and polite. Failure to adhere to the requirements of the contract is grounds for reduced or no allowance that week.

Several things prompted our decision to give him an allowance:

1. Big Brother started asking for periodic "treats." Specifically, he would say things like "Let's go to Target so we can buy toy 'x'."

2. Because of #1 above, we decided it was time to start to teach him the value of money, and the importance of saving.

3. He really likes to count.

We thought that $2 per week was about right because he won't be able to buy a toy every week (until he realizes he can load up on Hot Wheels and Matchbox cars), but can save enough money to buy things he'd like in a reasonable time frame (i.e., 1-2 months).

The first thing he told me he wanted was a "Tokyo Mater" RC car. These, of course, run $35-40, and we had a small fit over the fact that such a gift might have to wait for the Jolly Old Elf.

However, we were quickly placated with the thought of a color-changing Matchbox car.

Of course, the next day we had a little larger fit over the fact that we were not going to Target to buy the color-changing Matchbox car.

(Despite singing the "Days of the Week" song daily, 5 year-olds don't have the best understanding of time. Apparently, he thought if he made his bed once and put his clothes in the hamper that he could have the toy. When I said "No", I was yelled at asked to pull over the van and leave, presumably so he could drive his brothers to Target.)

But he's working on it. And, "if you keep doing that, we'll have to take away your allowance" has helped tip the balance of power a little more in Mom-E and Dad-E's favor.

Ultimately, I think the allowance will teach Big Brother many important life lessons about money:

1. You have to work and save for the things you want. Delayed gratification is important.

2. You take better care of your stuff when you worked hard to buy it, precisely because you know how long and hard you had to work to get it.

3. You can't spend more than you can afford. When the money is gone, you have to keep working if you want something else. An allowance is not a credit card.

Have a good weekend,
Spend it wisely,


  1. When I received my first allowance (25 cents at age 8), I promptly challenged my dad to a game of heads or tails with said quarter, and bet my quarter that I would win. I lost. And he took my quarter. That was 20 years ago and I remember it like it was yesterday.
    Moral of the story: Don't let your kids gamble with their allowance. (though i did save up for 4 weeks and bought a scratch-and-win ticket and won $10) :D

  2. I have been thinking of doing a chart system with my four year old. In which she will receive a sticker for items that she would need to complete and by the end of the month or week (I have not fully decided) she could get a small treat (not a huge toy or anything of the sort). My little one needs to learn patience and I think this will help her understand the meaning and worth of things and the believe in hard work. I think it will be rough for them for the first few months, but they will get the hang of it. Keep us posted on how it goes...did he ask to go to Target yet? Rosi

  3. This is so great! So many great life lessons are taught with your allowance system. I got an allowance when I was a kid and it seemed like I bought more things that I wanted than other kids. Basically, my parents bought me things that I needed, but if I wanted something, I remember purchasing it with my allowance. Not that I haven't made monetary mistakes, but I feel like I'm pretty good with money to this day. I think allowance is an excellent way to teach a child the value of a dollar. That will serve big brother well for all of his years to come! Great idea!love, aunt-e

  4. An allowance is definitely a good way to teach the value of money. Good job!

  5. Very good. He'll take better care of his stuff if he works hard for it. An important life lesson. Go Daddy Go!

  6. @twistedxtian: Did you continue to get an allowance after gambling with it a second time?

    @Aunt-E: That's our goal.

    @Rosi: He asks to go to Target almost daily.

    @Gramm-E: We're working at it.

    @O'Shea: Agreed that it's an important life lesson.