I grew up in a family that, for the most part, didn’t do allowances. Occasionally our parents would try to give us a quarter each week, but they never kept it up for long periods of time. The understanding was that our parents would provide what we needed, so we didn’t need much money of our own.
Even though we didn’t get regular allowances as kids, that’s not to say we didn’t learn about money. We did. Once a year, we’d be given money in red envelopes at New Year’s. After I tucked my envelope under my pillow at night and slept on it, I loved opening it the next morning to see how much was inside. When I was in high school and would leave home for school trips, my parents would send me with some money so I could buy meals that weren’t provided. By then, I had a part-time job as a tutor, so I was earning a bit of spending money too. Throughout my childhood, our parents were fairly open with how they thought about spending, saving, and giving. Even now, as an adult, I still chat with my mom and my dad about money and we learn from each other.
When I became a parent, I assumed I’d probably do the same as my folks: no regular allowances. And when my kids were both under five, I couldn’t imagine what they could possibly need to spend money on anyway. But I ended up reading two books that began to shift my thinking: How to Raise an Adult by Julie Lythcott-Haims, and The Opposite of Spoiled by Ron Leiber.
The first helped me focus on what I hoped my kids would be like when they grew up and how I might take steps now as a parent to help them learn key life lessons. The second made the case to me for allowance as a tool for learning. Up until that point, I had only thought of allowance as a mechanism for kids’ spending, but the book’s anecdotes about teens who managed their own budgets for clothing, gifts, and personal hygiene captured my imagination. They were learning to spend, save, and give to what’s important when the stakes were still low and they still had their parents nearby to support them. If I wanted to trust my kids with that much money and responsibility in high school, how might I help them start building their budgeting muscles earlier rather than later?
I was still mulling this over when my then-kindergartener started asking about getting an allowance. She’d heard about the idea from other kids at school. As parents, we talked about the possibility and decided we’d run an experiment for a single summer. If it went well, we’d consider keeping it up. But if not, we’d stop.
Practically speaking, we used coins so our 4- and 6-year-old could see the money building up and going down concretely. (This is the same reason Goodbudget shows those green and red bars!) And while I’d heard of some families that give a weekly allowance that’s one dollar for each year, that didn’t feel right for us. We went with one quarter for each year, so the 4-year-old got four quarters and the six-year-old got six each week. We also set them up with three jars — spend, save, and give — and taught them to put some money in each jar every week. I was pretty good about handing out allowance weekly at the beginning, but then I started to forget. But thankfully, even with my foibles, they’ve been learning.
As my kids make decisions with their coins and dollar bills, I see them working out their own tendencies and tackling some of the same challenges we face as adults. “I want a truck, a treat, and stickers, but I don’t have enough money for all of them… how do I pick?” “But I don’t want to give this money away… I want to keep it for myself.” “I want a kid camera, but I don’t have enough for it right now, how will I save up?” And watching them trying to figure it out makes me so proud.
It’s fun to see their excitement when they buy something for themselves, like a pack of gum. Or our younger one’s pride and affection when he walked to our local coffee shop and bought a bag of beans for Dad’s Christmas present. And I was glad to see my older child save up over several months for a bigger item — and learn that some big purchases lose their luster after a while.
When they get older, I can see us moving our coin system into Goodbudget. And I’ve wondered about playing with “matching funds” like I’ve heard other parents do to incentivize saving or teach about interest. For now, this is working for us. If it stops serving the learning goals, or if our goals change, I’d be happy to change it up or drop it altogether.