When should parents introduce the concept of an allowance to their children? I hadn’t given this much thought until I found myself pondering it, assuming it would align with report card season or the start of chore charts on the fridge. My initial belief was that allowance should serve as a reward for good behavior, and my kids would need to earn their money. I even began to wonder about the going rate for chores in 2017.
Then, a friend sent me an enlightening article from Slate that challenged my assumptions. The experts suggested that parents should start giving allowances as soon as children show an interest in money, as studies indicate that kids begin to understand concepts of money during their preschool years. The child-development specialists affiliated with Sesame Street discovered that preschoolers can differentiate between needs and wants. This revelation struck a chord with me.
Growing up, discussions about money were nonexistent in my household, leaving me feeling uncomfortable navigating financial matters. When I began my career, I was at a disadvantage during salary negotiations, lacking the confidence to advocate for my worth. I didn’t want my children to experience that same vulnerability. So, how could I instill the value of money in them?
My spouse and I decided to dive into the world of financial literacy. We realized that while we live paycheck to paycheck, our children wouldn’t have to face similar financial challenges. We aimed to make them comfortable discussing money while simultaneously learning about personal finance ourselves.
We took the advice from the Slate article to heart and implemented a system using three jars labeled “Save,” “Donate,” and “Spend.” Each Friday, which the kids refer to as payday, we distribute a set amount of dollar bills corresponding to their ages. This means our older child receives more than the youngest, reflecting their maturity and understanding.
The three jars symbolize the financial values we want to instill. The spending jar receives the least amount of money, emphasizing the importance of prioritizing needs over wants. The savings jar encourages patience and the understanding that worthwhile items require effort to attain. Finally, the donation jar teaches the significance of using money to help others and make a positive impact.
One crucial aspect we learned is that allowances should not be tied to behavior or performance. This was a challenge for me initially; I wanted to ensure that allowance was treated as a consistent learning tool. According to the experts, “Allowance is instructional, and money is a tool for learning.” Just as we wouldn’t take away educational materials for incomplete chores, we shouldn’t withhold money either. To break the cycle of poor financial habits, we must teach our children that money is a tool for learning, not a reward or punishment.
As we followed these guidelines, we were astonished by how our children began to engage with money. Recently, we allowed them to withdraw $10 from their savings jars to purchase new toys. They spent considerable time weighing their options—a Zorro pistol set versus a vibrant art kit. They recognized that it took months of saving to reach this point and were careful with their decisions, showcasing a welcome shift in their understanding.
Ultimately, they chose their toys and, to my delight, took special care of their new belongings. As a parent, witnessing my children make informed financial choices and treat their possessions responsibly filled me with pride. I’m optimistic that we are on the right path to breaking the cycle of financial insecurity in our family.
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In conclusion, engaging our children in discussions about money not only prepares them for the future but also helps us as parents grow alongside them. To learn more about how to foster open conversations regarding finances, consider reading our privacy policy here.