In our family, the kids start contributing to the family chores when they were four and five. These simple tasks included putting away their laundry, making their bed, and cleaning up after dinner. They didn’t get paid for these chores because it was their contribution to the family. A year later, they became money earners in the family with chores that were worthy of payment. They folded the family’s laundry, swept the kitchen, and took the garbage out. These weekly allowances for chores were paid for weeks when they completed their work.
Most of us would agree that if the kids earned their money, so they should be able to do whatever they want with their allowance. However, there are the minority, that believe children should save their money. A balance between the two is optimal.
If you are providing an allowance to your children, you have a great opportunity to teach them the valuable lesson of budgeting. It is a skill that will benefit them financially when they are adults. Budgeting is difficult for adults, so it’s not easy for kids. But, their budgets are much simpler than ours.
Children should be taught that a portion of their allowance is for savings, and the other portion can be spent on what they want. If what they have left after the allocation to savings isn’t enough for what they want, then, they will need to continue to accumulate each until they have enough. The allowance given doesn’t have to be much. If for example, they get five dollars each week, two dollars can be put in to savings and the other three can be spent on what they want.
For example, during Christmas, our children can buy presents for each and for mom and dad. But, they have a limit on how much they can spend, and they have to save for that from their allowance. They know what they want to spend and how much they need, so they save for it. Learning to save teach them responsibility and accountability.