So many questions come up when figuring out what to do about money… Do you give allowance? How much? Do they have to earn it? If so, how? What if they expect you to give them money for doing chores, getting good grades, or practicing their instruments? When do you start giving them money? What if they want to buy things you don’t want them to buy? How do I teach my kids about appropriately managing money without teaching a sense of entitlement? …
There’s a lot of conflicting ideas out there and there’s definitely lots of different opinions. My personal favorite ideas come from Merrilee Boyack’s book “The Parenting Breakthrough” which I highly recommend reading. Here’s some of the basic notes I took while listening to her BYU Education Week class:
- We need to give children money so they can learn how to manage money (a training opportunity)
- Give monthly allowance from ages 5-12. She paid them enough for them to learn but not enough to be happy. Keep them poor :). She gave $1 per year of age (so a 5 year old got $5 a month. She gave them their allowance the first Saturday of every month, and then taught them that following Fast Sunday to pay their tithing. For little kids, she would give one dollar bills and change.
- Boyack doesn’t believe in paying kids for regular family chores (i.e. doing dishes) or self-care (i.e. cleaning up their room, etc). We need to teach: “We are in a family and we work together and help each other take care of our home. No one gets paid for family work.” I think I agree with this because wouldn’t kids likely gain a sense of entitlement and expect to be paid for all types of work?
- However, Boyack does have “Money Chores” which are extra chores that you would like to get done (i.e. cleaning the baseboards, defrosting the freezer, etc). This way they do have a way to earn more money.
- When it comes to micromanaging, she let them make their own decisions. For example, we want our kids to learn from their own “mistakes” when they buy really cheap toys and they break the next day. Or, to be sad when they blow all their money all at once and don’t have money later that month. The point of all this is to learn lots from their mistakes while the price tag is low and well before they are ready for a credit card! She did establish 2 rules 1. You can only buy one candy item each month and 2. You can't buy something that would distract from the Spirit of the home.
- End monthly allowance at age 12 and move to a yearly or bi-yearly "clothes allowance". Let them make a list (maybe with your help) of what clothing they need for the new school year. Give them that money allotment and they have to buy their own clothes. This gives them the chance to learn about budgeting, how to save money, etc. She added a caveat that you will probably have to buy their underwear and Sunday clothes!
- Create your own family bank (a cool container, maybe spray paint it sparkly gold!). Every now and then, have a “Matching Program” – so you could say to your 5 year old, “When you save $10 in the “bank,” you automatically get another $10! We want saving to be absolutely delicious to them. Or sometime say “Okay, we’ve got a special going on at the bank right now - an “Interest Program.” She had the interest money earned go towards mission/college so this money would go in a different account. She also has ideas about borrowing and loaning money. I think she explains details in her book.
- I also loved her idea for having “Monopoly Lessons” every now and then for FHE. You gather all the monopoly and give them each their own big pile and then go through some different scenarios. So they count up their money and then you start with Tithing. They have to give 10% to the middle. Then you have a certain house payment, monthly insurance, utilities, clothing, misc, savings,… on an on until they run out of money and realize it takes lots of effort to not spend more than you earn! I love that!