• I get a lot of questions about how we give our kids an allowance. Turns out it is not as easy as handing your kid a five dollar bill and being done with it. After all, you want your kids to learn all about how to respect their money. How to save it, give it, and properly spend it, right? So this is how it works in our family.

    First, my husband and I sat down and figured out the maximum allowance we could comfortably and happily give our children. In order to emphasize that work equals money our kids only get allowance for doing chores. They can earn their money two ways, one by doing a chore without asking. For example, if my daughter makes her bed, or cleans her room without me asking she gets a dollar.

    The majority of her money goes into spending because we do want her to enjoy her money, and have the joy of buying something for herself.

    Second, she earns money by doing special things that I ask of her, helping with the laundry, or doing dishes for example. At the end of the day (or week, depending) we look at the money she has earned and divide it into different piggy banks. She has one bank for savings, we put ten percent in there. One for giving, another ten percent there. The rest goes into her spending bank. The majority of her money goes into spending because we do want her to enjoy her money, and have the joy of buying something for herself. The saving bank she doesn’t touch, no matter what. Even if there is something special that she wants to buy. The money in her giving bank goes to birthday presents for her friends, or to various charities that she chooses.

    Last month she decided to buy groceries for our church’s pantry. Hopefully if we encourage healthy money habits now, they will stick forever.