Allowances

This is the piggy bank Fletcher got from us for his birthday. We bought it at a toy store here in town, but I first saw it online here. It is divided into four sections. Save, Spend, Donate, and Invest. He has always had a small piggy bank, but he hasn't really been old enough to understand it all until now. They've been learning about money in kindergarten.

When we worked with college students, we found that there were far too many of them that didn't really understand saving, spending, investing, tithing, buying on credit, etc. We hope to instill in our children a good understanding of money and how to use it properly.

Here's our plan that I am sure we will have to tweek along the way. Fletcher will start to receive an allowance of $2.50 each week (we may change that to two weeks). It will be in the form of 10 quarters. So the tithe (Donate) will be easy math. Ten percent is one quarter. Two more will go to "Save", one to "Invest" and 6 will go to "Spend". Although Fletcher already has a few stocks that were purchased for him as a gift, we probaby won't spend a lot of time on the Invest portion, at least not for awhile. We'll help him decide on something he'd like to save for like a Wii game. He asks to go out to eat at restaurants so we will let him use some of his "Spend" money to see how expensive that can be.

At this point, allowances will not be tied to anything like chores or grades. We are using it as a teaching tool. Plus, I want him realize that as a part of our family he is expected to do certain things like clean up his room without being paid for it. If he does additional work like shining Kevin's work shoes, then that may be a way to earn some extra cash.

Anyone else have suggestions on teaching kids about money?