Who Knows Where I Can Buy A Money Tree?

Does anyone else’s kid act like money grows on trees?  My kids don’t get the concept of money AT ALL.  They think there is a little plastic card that will buy them anything they want, and they don’t realize that at some point every month, the grim reaper comes to call.

Or, as my brother said to my mom when he was a little boy, “But mom, you have money.  You still have checks left!”

My 8-year-old son has just recently become very curious about money.  He wants to know what everything costs.  He is intrigued with the whole concept of credit cards, and he looks forward to getting his allowance every week.

In an attempt to dispel the myth my children seem to hold that material possessions are easy to come by and even easier to replace, we have begun giving allowances.  I have read a lot of theories on the allowance and how to handle it – to tie it to chores or not, to give it or not, and there are good arguments on every side.  We have come up with a little system that seems to work for us.

As I said, we do give an allowance.  Yes, I realize it is all coming from the same pot, and they are still spending our money.  But we figure that giving the children an appropriate amount of money to manage each week is a good lesson in the value of possessions and also money management.  So we don’t just hand out bills and call it a day.  We teach them to give some, save some, and spend some.

Hub gives allowance on Sunday mornings, and they each take a portion to church for the offering plate.  The rest they put in their piggy banks.  Then when we go to the mall or Target or the pool, if they want a treat, they buy it themselves.  I don’t buy toys for no occasion.  If they want something, they can save up for it.

As they get older, we will give them more money to manage and more to be responsible for.  I have a friend who has her kids purchase all of their personal belongings from their allowances.  The kids who like pricey clothes learn to buy a few nice items.  The ones who don’t care so much about labels may get more clothes for the money they have.  She says she gives them the amount she would normally spend on their clothes and other necessities, and then they have to manage it themselves.  She likes how this cuts down on the kids begging for the big-name labels that cost 3X what they should.  If they want them, they must learn to sacrifice in other areas.  I think that makes a lot of sense.

We don’t tie our children’s allowance to their chores.  They do have a few basic chores to do, and otherwise they are expected to pitch in and help around the house when we ask.  We feel that this is just part of being a family.  If there are big jobs to do, we may offer to pay them extra.  As they get older, we’ll flesh this out a bit more.  It might get to the point when withholding allowance might be a good consequence to slacking on chores, but at this age, we haven’t found that to be necessary.

So how do you handle allowances and chores in your household?  I’d love to know.