We’re in our second week of school and I still haven’t brought myself to give my daughter the allowance I had thought I would be giving her as soon as she became a kindergartener. Just last week I shared an article over at Babble titled “7 Tips for Teaching Young Kids About Money and Managing an Allowance” where I mention:
I recently had the chance to join a webinar titled “Moms Talking Money,” presented by Women & Co, a service of Citi that is dedicated to helping women strengthen their financial futures, where Linda Descano, President and CEO, told us that kindergarten is actually an ideal time to give kids their first allowance and introduce them to the concept of money beyond knowing their coins. Best practice, according to Descano and other experts, is to give them one dollar per year of age. In this case, my girl will get $5 dollars each week. Some parents decide to do it bi-weekly, and that’s fine too.
This advice really resonated with me and sounded logical because more than teaching my daughter about how to earn money, I’m interested in her learning what to do with it once she has it. I’m a strong believer that we must first focus on developing our passions and finding out what we’re good amazing at and encourage our kids to do the same by going after that with no regret. Yes, that means developing more than a work ethic, it requires a go-getter attitude and abundance will follow.
So, unlike most, I won’t make my daughter “work” for her allowance. She’s only five. That doesn’t mean that she’s not expected to do her share around the house, but she will do it because she’s part of the family and we all take care of each other together.
Her allowance will be something else that she will need to take care of and decide if she will spend it, save it or donate it. She has those options and I want her to learn money management that way.
Now, why haven’t I done it yet? I think it’s because there’s been too much coming her way in the last two weeks. As soon as I feel she’s settled into her new life, I will have the allowance and money management talk with her and she’ll get $5 every Sunday. We’ll use that time to talk about what she plans to do with it, how it can stretch further or help others, and in turn help herself by giving.
How do you tackle the issue of allowance and money with your kids? Is giving an allowance to a 5-year-old too soon or just right?
Would love to know what you think and will give a $50 Citibank gift card* to two of you who answer in the comments below and to two who share in the forum at SpanglishBaby Playground.
*Redemption of gift card is governed by gift card terms
{Photo by chris.vandyk on flickr}
I have just read a good Dutch book called “Goed met Geld”, it’s all about teaching kids about finances and raising financially wise kids. The book says that kids of about 6 years of age are ready for an allowance because they recognize the different coins and they start doing maths at school. I can imagine that a kid can be ready for an allowance younger, so some can be ready at 5 years of age! The idea of an allowance is really good because you teach kids to be responsible for their money. They learn to make choices too. It’s so important that our kids learn to choose and that they learn to accept and live with the consequences of their choice. Teaching our kids how to handle money is teaching them how to handle life! Interested in your future experiences with the allowance. Greetings Janneke
I think that an allowance is a good way to teach kids about proper saving/spending/budgeting habits and it’s never too early to start. The amount of money should definitely vary by age, but $5 doesn’t seem excessive to me for a 5 year old. I do think that allowances should be totally unrelated to chores. Kids should do chores just as part of being a family member,
I started giving my daughter allowance since she started school too. She is now 12 years old. I also took her to our local credit union where she opened a “Gator Savers” account, a savings account for kids. Everytime they make a deposit they get to pick out of a treasure chest. Back then, she wanted to deposit all of her money in order to get a prize. Now, she keeps more of it with her to shop. The way she earns her allowance is by reading books, doing chores, and bringing home A’s from school. She gets it weekly and on progress report day she gets a bonus $10 per A she gets in her classes. At first I was just giving her a weekly allowance accorging to age. 6 yrs old $6 a week. Now, she has to work for it. As a tween she got really laid back expecting her allowance and not doing much at home. So we had to make a change.
I think it is a great idea to start giving allowances to kids and start teaching them at an early age the value of money. My son is also 5 and starting school next week, I never thought of giving him an allowance but I will start doing it once he settles in. I will make him save his own money to buy a toys and games and maybe that way he won’t destroy them so fast!!
.
I think that allowances are a great way to teach them not only about money but also basic math. At 5, your daughter can totally understand basic concepts so I think it is not too early. So, it’s just right!
I think allowances are fine at the age of five as long as the child understands that it is not a given, but a privilege and a tool for learning. My child has certain chores that she is expected to do since she is a part of our household and we all have jobs to do to keep our family running smoothly. If she decided for some reason that she was not going to do her chores, or that she wasn’t going to try her best in school, or behave like we know she can, that allowance would definitely be taken away. As long as an allowance can be used for learning and doesn’t turn into spoiling, (imagine a kid saying, “Well, if I’m not getting paid for doing it, I’m not going to do it!”) then I think an allowance at this time is fine.
My son just turned 4 and I think he is too young for an allowance. I do want him to learn proper cash management and good finances. For now I only use day to day household situations as a learning tool. Sometimes he would ask if we could buy something such as a new car, or a new household item, or a new toy and I would explain that we either don’t need it, or if we need it, we do not have the money for it yet, so when we do and if we still need it we may be able to buy it. I want my kids to learn that you should only live within your means and not rely on credit.
He has a piggy bank and I told him that if he finds loose cash (coins) around the house he could take it and put it in his piggy bank. He asked why? I told him when he has enough money he could decide what to do with it and maybe buy something small. Whenever he gets some cash as gift, we would ask him if he wants to save some in his bank. Right now most of his cash presents go to his college fund.
I am not sure when he will start getting allowances. But I do not like the idea of getting allowances for doing his house chores. As many of you said, those are expected because my children are part of the household period.
I love that you are discussing this because this is another thing that differed to my friends when I was growing up. I did not receive an allowance, I learned about it on TV. MY parents thought that it was silly to give a child money just because. Money had to be earned… and even if i tried saying “but i got 100 on my test” my dad’s response was “Well, that is what you’re supposed to do, get 100 on the test.” Even though my son is still very young, this is something that i have thought about because I think teaching children the value of money is very important, from an early age. I would also like to be more informative than my parents were (“money doesn’t grow on trees!”) and teach them the value of things that they ask for, the fact thattoys and food costs money, and mom and dad work hard for it.
I believe it is extremely important to teach children the concept of money, what it is, how to save, and that it is important to help the less fortunate. Many religions embrace the idea of charity, in the Jewish tradition, it is called tzedakah and children are taught about it from a very young age. It is one of Islam’s 5 pillars as well, to give to charity (zakah). This is perhaps one of the most important things I want to instill in my son.
I am not sure I would give my 5 year old 5 dollars a week, and if we do an allowance I think we would attach some kind of action that merits obtaining the money. I also agree that chores are something that children need to help out with, without a monetary compensation (everyone should chip in!) but if they go above and beyond their regular chores, then they should be compensated. My husband recalls that living in France, he used to buy the baguette everyday, and he would keep the change… that is a form of allowance, like a tip.
Allowances should not be seen as “givens” or taken for granted… they should be valued!
Diana – my mom used to do the same thing. When she asked me to go to the store (bodega/tienda) to buy something she needed, she would allow me to keep the change. So, I would always volunteer to go! :0)
I think starting an allowance at 5 is just right. I started mine at this age and they get $2 for each year of age .
i subscribe at ape2016(at)aol(dot)com
I don’t believe in allowance. I think children can have a list of chores that they can be paid for (aside from their regular chores). These chores would be clean out car, recycling bottles, folding laundry, etc. I think money means so much more when it is earned. My 6 year old daugher earned her money slowly and saved up to buy a barbie. I think it meant so much more to her than if I would have just given her money weekly and she bought it with her money. It becomes play money. I remember I had a friend when I was 12. She always had like $40 on her when we went shopping, whereas I had earned money by cleaning my dad’s office and filling up candy vending machines. I was much more carefuly with how I spent my money. She always spent all her money when we went out. I feel liek to this day I am careful with my purchases because I understood the true value of work and money. We paid for a car in cash a few days ago and the guy was blown away with our credit scores. To each his own, but our family will be earning money instead of giving it out.
I think letting a kid earn an allowance for extra chores is a good way to do it. I would want to teach my kids that you don’t just get money for free.
I think its fine. Let them learn young
I think it’s a good training tool and will help them develop a sense of hard working if done correctly. You could ask the little ones for some help here and there (nothing too serious, like mixing the cake batter when baking etc) and then give them a dollar or so for a treat!
Five isn’t too young depending on the child, but they have to learn there is responsibility with money. I believe in giving hem small chores depending upon their age. Earning money and learning things cost are important lessons to start early.
Kids need to earn money so I say no giving money to a 5-year-old. My duties is to teach my kids to love to work not expect something for nothing.
hope i win
I think allowance should be related to chores. $5/week seems appropriate for 5 year old as long as you help them manage it. Either by putting it in piggy bank or help save for something special.
I give allowance for doing things around the house. I want them to know early, what is necessary to earn money. I give anywhere from $2-$8 dollars, depending on what they do. They appreciate it.
I personally think 5 years old is a little young because they may not be able to fully understand and appreciate the concept of an allowance. I do however believe late elementary/early middle school aged children can grasp the concept a little better and appreciate it more.
Mine is still young enough that I don’t have to worry yet, but I’m sort of torn. On one hand, it seems like 5 is really early, but on the other hand, it could be good to establish responsible money habits early.
Wow. You are way more generous than I am. I just can’t imagine giving my kids $5 and $8 a week for no reason. My kids both have three banks that they carefully monitor. One is for Savings, one for Spending, and one for Giving. My kids have regular chores that they have to do at home that they are not paid for. These include things like cleaning their room, setting the table, brushing their teeth…things they are responsible for or that help our family function. But in addition, we have a separate list of things they can do to earn money. On this list we put things like crushing cans, raking the yard, sweeping the porch, washing windows, etc. These are extras. When they are paid, they have to put half their money in Savings, and then divide the rest between giving and spending. Each month, we all sit down and count their money. If they have the same amount in their savings as the previous month, I give them an extra dollar (interest!), but if they have more in their bank, I give them two dollars extra.
This may seem cheap, but last year, my daughter saved almost $200 which she put towards buying a dairy cow that she had been begging us for – for a long time! We chipped in the other $200 or so and bought her calf on her birthday. She REALLY loves her animals.
So our kids are allowed to spend their money however they want (unless it’s something we don’t allow), so that they enjoy buying something they want, but are also more thoughtful about what they REALLY want. They’re less likely to buy chucheria this way (though, yes, they still do sometimes and that’s okay). I think they value their money more because they earned it. At the same time, they lack for nothing because we buy them everything they need. We want our kids to grow up viewing and using money responsibly, but not see it – or things – as being easy to come by or more important than people.
PS – When kids use their own money to buy toys, they treat the toys a LOT better!
I have not started to give my younger two an allowance but if my husband and I have to go down to the basement to fix something or he is working on a car outside and he needs my quick help then I have my oldest watch the younger two and that is how she earns her money.
I think it’s okay because it starts teaching kids responsibility at a young age. Parents need to be prepared to withhold the allowance, though, if the chores aren’t done.
if your 5 year old understands the concept of an allowance maybe because an older sibiling gets one .. then i dont think 5 is too young . the denomination would be different .. but start teaching how to save for larger items
I like the idea of giving an allowance to a five year old. I think children should start learning the value of money to an extent at a young age.
I don’t think it is too young to learn you have to work for your money. Each child is different and it depends on their maturity and the parent’s patience!
I think 5 year olds should receive allowances. I will be giving my son an allowance when hes old enough.
I think five is fine, as long as you’re teaching them the value of SAVING some of that allowance.
Too soon.
My son is 5 years old and I recently started giving him an allowance. His allowance is conditional. Since he is tall enough to reach all of the buttons on the washer and dryer, he does his own laundry. With supervision he can complete a full laundry cycle, fold his own clothes, and put them away. For this, I give him $0.50 for the easy part (running the machines) and $1.00 for folding and putting away. These are not the regular household chores he is required to do for being part of them family. I encourage him to save his money. Often, when we are out and he wants something, I will remind him that he has money he can use for it if he so desires.
It really depends on the kid and why they are getting one. I don’t think an allowance should be given free and clear, I think it should be earned. If they are old enough for regular chores, then they are old enough to start getting a moderate allowance/reward/payment for those chores. Somewhere between 5 and 8 is where most kids seem to be ready for that responsibility, and it really does depend on the child.
My 5 year old understands that a dollar is worth more than a penny, but he still wants the penny because its shiny. Because of this, I think 5 is a bit young to give an allowance. We might wait until after the school starts teaching him the value of money since he doesn’t seem to get it just yet. As for the amount, I think $5 a week is a bit much when you already buy everything they need. $5 every two weeks seems better, or a dollar per week.
As for having to do chores to earn an allowance, I don’t agree with that either. I think kids should be required to help out and are perfectly capable of doing small tasks. If they want to do extra chores to earn money then that offer should be there.
I don’t have any kids.
I’m already an email subscriber.
holliister at gmail dot com
I thinking giving an allowence to a 5 yr old is great if they are doing chores.
I subscribed
knickgirl_3 at yahoo dot com
yes 5 might be too young, but i only have a 1 year old so im not sure yet
I think 5 yo is too young for an allowance. I think it starts when they are old enough to do bigger and more important chores so around middle school and I think you start off small with a weekly allowance
already an email subscriber
I think 5 is an okay age for an allowance if they’re doing chores to help out. I just started a chore chart with my 5 and 6 year olds and they’ll get an allowance each week they finish their chores where they’ll have to split their money between spending, saving and donations. My kids will not be getting $5 a week though. They get excited about a penny, so I’m thinking no more than a dollar each per week.
I subscribe via e-mail
I do not give any allowance to my kids (9 and 7). I actually work from home (childcare) and they sometimes help me when I ask them to bring me something, etc. A while ago they asked me money in exchange of their help and we talked about it. A friend of my son is in a similar situation and receives money to help mom “babysitting”. I explained my children that mom works to be able to give them a better live (i.e. good after school classes, travel, etc.) and even they complained for a while now they totally forgot about this subject (asking for money) plus they see this friend is constantly buying toys with the money he earns and then he gets tired of his new toy so wants to get another toy. I do not like the idea of my children buying things all the time. They actually have some money saved from el Raton Perez, gift cards/cash they have received as presents, so they do get money any ways but not as a weekly allowance. And I see the differences also of personality: my daughter is much more careful with her savings than my son. He would go to the 1 dollar store and buy any cheap toy then 2 days later either is broken or he is not interested anymore. I think there are other ways to teach children about money value. The other day I had to give the school some money for field trips and did not have enough cash on me so I asked them to lend me some of their money/savings. They did it and we counted the money together… They were both happy. One thing I must say is that this article made me thought about the possibility of given them an allowance but probably in the future and helping them manage the money. We are a low income family and want them to learn/understand that money IT IS INDEED IMPORTANT and that is why we do give them money just “because” but only for special occasions and should not be used just “because I have a craving for this or that…”
Very very interesting! I haven’t considered that yet but now that I read all this I want to start thinking about it. I’m not sure if I will give my son an allowance just yet (he’s almost 6 and starting Kinder). But I don’t think it would be too early, I think it depends on the family. I first want to teach him more about what to do with the money and how to handle it so he wont just use it for spending. I think i have to think it through! But I love the idea of teaching them early!
I was never given an allowance as a kid. My husband and I do now work right now so I do not see a way or reason to give my kids an allowance. (kids are aged 5 and 7) My kids are happy and do not know what an allowance is right now. When they find out they will understand that there is no reason for them to have one. Heck, they would be happy just to be allowed to play the video game for longer or at all. What would my 5 year old do with money anyhow? I do teach them about money however. When they want a toy or want to go out to eat, I explain to them that we dont’ have money for it. I tell them way to get money and when we do go out to eat or I do get a toy I explain to them how I got the money and why I am choosing to spend it now. Sometimes they do get money from one source or another, and my kids (mostly my son) are in a hurry to spend it, however I try to tell them that its better to save it up and get something bigger than to spend that $1 or $2 on something so small. I also teach them that food or other things are a better buy than a toy. I don’t encourage or teach my kids about donating, as we are that poor family. However, I do teach them that there are other kids that do have less and I teach them that if you don’t need it, dont’ take it. My kids at their ages know kindness and other good traits and I don’t have to teach them that with an allowence.
I am already a subscriber.
I think children should get money for doing things around the house. It will teach them to be responsible. I started to give money to my son when he was 6
My daughter is only two so I have not tackled this issue yet; I was never given an “allowance” as a kid, nor was I just given money when I wanted it. I think for me it will be an allowance in exchange for “chores”, no, not slave labor. I want my child to associate labor with reward..if that makes sense? If you just give a child money that will only enable them do nothing = get rewarded is not the message I want to send to my child.
I think 5 is a bit too young; I started my daughter at 8 with an allowance and she received it as long as her chore list was done (and correctly) each week. That included feeding the dogs and taking care of her own room as well as putting away the dishes from the dishwasher each night. Now that she’s a teenager, the chores have increased but so has the money.
In my opinion $2 is a good allowance for a mature 5 year old. I also left a lengthy post in the forum.
I’m an email subscriber.
no age is too young, but i feel they have to earn it… chores, good deeds, etc. they also have to meet certain standards at school… poor grades = suspended allowance until improved,
Give small rewards think would be good but not before 5 years, they learn to care for and handle money!
i would not start allowance before age 5
My son is four and if he helps out during the day and doesn’t talk back then he gets the pocket change that either myself or his father has from the day.
We started giving an allowance (not really every week but whenever my son accomplished certain tasks) at age 8. I think 5 may be a little too young to understand the full concept of money and responsibility.
I have a 5 year old and we do give him an allowance once a week on the same day each week if he picks up toys etc. If he doesn’t pick up then he doesn’t get any money. I think he is starting to understand the concept of working some
My kids our past allowance age but it used to go for when they earned allowance truly they got it.
I don’t think that 5 is too young. In fact, why not earlier?!
We began teaching our children about saving money beginning the first time they uttered “I want.” They haven’t had an allowance per se, but we do help them collect money that they get, find or work for. We make lists with them and goals. Some things they want would be unrealistic for their ability to earn money, but we have made them wait a certain amount of time and money saving before helping them purchase it with their own saved money.
I subscribe
Giving allowance is a good way to teach kids about money and how to manage it but I think giving a 5 year old an allowance is just too soon.
I don’t think giving a small allowance to a 5 year old is too soon. But I do believe in dividing the allowance into three parts. Say you are giving the child $6. then $2 of the allowance is theirs to spend however they see fit — candy, toy, whatever. The next $2 of the allowance must be saved and used for a larger purchase. You can set a savings goal in advance, like a video game system or bicycle. The third $2 amount is saved for charity. Once or twice a year, the child gets to pick a charity to give the money to. You should see the big smiles when the Thank You letter arrives in the child’s name!
I think kids should learn the concept of money from an early age. However, too early and the child does not have the adequate brain maturity to understand the concept of money.
When my son was younger (he’s 22 now) I started teaching him the importance of tithing and saving. One tenth or more of his allowance was to go to tithe to God, one tenth or more was to go in his savings account and the rest was his to spend as he pleased. He saved enough one summer by mowing lawns and other chores to buy a trampoline and was SO proud of his accomplishment!
Thanks SO much for the giveaway!!!
I subscribed to all your newsletters. Thank you for the giveaway!!!
I think giving an allowance to a 5 yr. old is good, it teaches them responsibility about doing chores & saving money.
my son is 5 and i don’t think he is ready for an allowance, doesn’t grasp cost yet. he thinks a quarter is a million dollars. we will probably start an allowance when he is 6. and have him learn to put 1/2 in savings
nannypanpan@gmail.com
I think age 5 is just about the right age to start giving a small allowance.
I think an allowance needs to be earned not freely given. Set up chores to earn the money.
There is no allowance, but earned money. If they are interested in spending money, they have to learn how to earn it. Also, giving and saving need to be a part of the lesson. They can’t just spend every cent of what they earn.
I don’t actually have any children myself but I think an allowance is good. I didn’t start earning one until I was 10 years old though. My mother would take half of it and put it in a savings account for me and the other half I could spend on what I wanted, $20/week. By the time I was 16 I had enough saved to buy an old used old car and a new bigger bed. It was so nice to have that money saved for me so I could make bigger purchases once I was more responsible. =)
I think 5 not too young my daughter has to keep her room clean all week to get hers
Don’t have kids but I would think that its just right. Especially if you get them to do stuff for you.
My kids allowance is received for their doing chores. As long as your kids are old enough to do chores, and as long as they realize the allowance is a reward for doing them, then any age is fine.
As soon as they understand what allowance is I think that it’s fine and they are old enough. I think that kids shouldn’t just get an allowance however without completing small tasks.
I think giving kids an allowance at the age of five is ok. Giving them small responsibilities at that age and rewarding them with a small allowance is a good way for them to learn
From my personal opinion and experience, I think giving allowance toa 5 year old is way too soon! LOL I remember when my daughter was 5 and she was looking into my purse and then I found small pieces of $100 dollar bill allover the house! lol
I subscribed
I think it’s important to start teaching kids about money early – not just giving them money but teaching them the value in earning, spending and saving it
I think, if they earn it, its never to early to give an allowance.
In early elementary school.
If they can handle lunch money, they can handle an allowance.
I rely on each of the strategies you have provided to your submit. These are convincing which enable it to undoubtedly function. Nonetheless, the actual articles have become speedy for beginners. Might just you please increase these people slightly out of up coming time period? Many thanks for a article.