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Kids and Money

May 27th, 2014 at 08:21 am

LAL's blog entry reminded me (peripherally) of a conversation I had with my sister yesterday, and I figured I might as well get some thoughts from those of you here who have been through this. My niece (E) is 4 and a half, and starts kindergarten in the fall. When school starts, my sister is going to start giving E a small allowance and teaching her about finances.

Of course at E's age (nearly 5 by then), it will be simple, but we were discussing different ways to handle it. Sis doesn't want to just give E money as an "entitlement", so there will be 'chores' attached to it. She also doesn't want to 'pay' E for doing tasks that she should be doing anyway -- making her bed, putting away toys, cleaning her room, etc. Yard work -- picking up sticks, or helping rake leaves -- would be a 'payable extra'.

We got into a grey area with tasks like helping clean the house, doing the dishes, etc. On the one hand, those are things E should be doing as part of living in the house; on the other hand, dusting and vacuuming are pretty typical "chores", I'd think, or at least they were when we were growing up.

The other question was how much she should get. One book my sister was reading said kids should get half their age per week, at least at this age. So $2 or $2.50 per week -- which Sis feels is a lot. (Though I did suggest she start right off having E put 50% to savings, and then dividing the remaining 50% between spending and giving. They're not religious, so there isn't a 'tithe' requirement; I had suggested 25/25 but maybe 30% spending/20% giving would be more appropriate.)

We got an 'allowance' as kids but it was basically just enough to pay for lunch every day, until high school when we got $5 extra. I don't recall having any chores attached to it. My sister doesn't even remember getting an allowance, so we don't really have a lot of our own experience on which to draw!

What have you all done with your kids (or what did your parents do with you)? What worked and what definitely didn't? Do you pay for household chores, or just those that go above and beyond? What's an appropriate allowance for a 5 year old?