I thought I'd posted my views on money and allowance before, but I don't see them here. And, since I'm making more of an effort to keep up with my blog, and, because money stuff comes up almost every day, I guess it's worth spending some time on it again even if I've done it once before...
When Rachel was in elementary school they sold Popsicles on Fridays after lunch for $1 each. I was the volunteer mom who ordered the goodies, stocked the freezer, and arranged for volunteers to sell the treats. I was there a lot of Friday afternoons and I often watched children buy a treat, eat two bites, and then throw it out before heading to recess. My daughter did this a few times before I asked her, "Why do you buy the Popsicle if you don't really want it?" She said, "If I don't buy a Popsicle, I have to give you back the dollar and then I have nothing."
The next week I tried an experiment. I told her that I was giving her $1. I said that it belonged to her. She could chose to spend it at school or save it and keep it for whatever else she wanted. She saved it until after school and spent it on candy at Walgreen's. A similar item, but this time she chose a candy she really wanted and ate it all.
(Please note, my choices here never hurt the overall school sales and I continued to contribute my time and efforts so that there was no significant loss when Rachel bought Friday Popsicles less frequently.)
After this I began giving Rachel a weekly allowance. It was about $5 a week. Whatever the amount, it was about the same amount of money I was spending on "junk" that she asked for when we were out running errands, when we passed a vending machine, or when we stopped at a garage sale. I was spending about $1 each time we went out on some little treat or toy.
And, what was she doing to earn a treat? Behaving? Shouldn't she behave anyway? When I took some time to look at the big picture I saw that I was really wasting my money. She wasn't learning anything valuable. The items went unused or unappreciated minutes after we got home. And, even though it wasn't a lot of money, it was adding up.
Once I started giving Rachel the allowance, it was up to her to buy all that extra stuff with her own money. And, all of a sudden, she became much more picky. She became aware of which candy costs more and which colored pencils lasted the longest. She took more time to consider what she really wanted and often chose nothing in order to avoid wasting her own money. (And, consequently, she and I were no longer wasting my money.)
As time went by, I took it further... on a vacation I would give her extra money; a vacation budget. For example, she might get an extra $40 to spend while we are on vacation. Now she has to chose if she wants to use that money to buy the over priced t-shirt or the less expensive magnet or the stuffed animal to join the thousands of others in her room back home. And, what she didn't spend she could keep. Just like I budgeted money for vacation and if I didn't spend it all, I could then use it for something different back home.
10 years later it's now part of how all money I give her is handled. She gets a weekly allowance and figures out how much she needs for her weekend plans and what else she wants. She chooses if she's going to spend more on snacks at the movie theater or save those dollars for ice cream after the movie. Or, maybe she wants to be frugal and rent a movie and eat what we have in the kitchen for free. She plans ahead making note when she has something expensive coming up and she needs to save. She gets a clothing budget. She can spend it all on the most expensive brand names and have a few items to wear or she can spend it on lots of less expensive clothes. She makes her own choices and works for extra money when she wants more expensive things. Same thing for a haircut. She knows how much I'm willing to pay and she can make an appointment at a salon at that price point or she can pay the difference.
I've done the same with Kate. She gets a weekly allowance and can spend it on whatever goofy items catch her eye. She likes to save up for bigger things more than Rachel did at the same age, but they both understand the value of money and of choosing purchases wisely. I'm proud of how well they do. I think they are both better at it than I am so it's not something they were ever going to learn by my example!
Every child is different and some might not be able to handle the responsibility quite so widely, but I think the whole system has been pretty simple and would work for most families. Some families also have rules about children putting some of their allowance in savings and giving some to charity. You'd have to work that in somehow. In our case I let it be their choice. Both have chosen to put money in savings and to give money to charity on their own and again, I think it's held more meaning because they have had a choice.
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