Do you give your kids Allowance? I’ll be honest it shocks me how many times I have talked to other parents and they say they don’t give allowance. My kids are to young, They get whatever they want, he doesn’t do any chores.. These are a couple excuses I hear about people not paying out an allowance. I believe you should be paying an allowance to your kids for multiple reasons.
My son is 4 but we started to give him 2 dollars every Sunday when he was 3. He has one chore, feed the dog and keep her water bowl filled. Cleaning his room or his mess, we believe he should just do. He does but sometimes needs to be told over and over again…. haha kids. Now I’m not a stickler on our dogs food if hes not around Ill feed her if the bowls empty or top up her water but if hes around I’ll remind him to do it or get no allowance. (I always give the allowance anyways)
I remember as a kid getting like 25 cents a week and running to the convenience store down the street and buying penny candies or 5 cent candies. Oh the good old days….. Clearly I was a natural spender and candy addict.
My son is nothing like me in this front. He is a saver (well I am now), yup I think all our finance talk around the house is spreading to him. He will take that toonie and put it in his piggy bank or wallet. When he gets 5 bucks in change he will ask for a 5 dollar bill to exchange since he likes the bills in his wallet. We have a 4 year old that is starting to know what a moose(quarter), boat (dime), Beaver (nickel), Loonie (goose) and toonie (weird coin/ polar bear) is worth! It’s a little win as parents for us.
Interest and Taxes?
One week we had a some dinner birthday party or something and only had like 30 bucks cash on us. I asked our son to borrow 20 bucks so we didn’t need to go to a bank and could put that in the gift. We live in a debit world now so we don’t carry much cash around with us anymore. Everyday after he lent us that 20 bucks, he would ask Dad do you got that 20 bucks? also that 2 bucks for my allowance? haha. I didn’t have it, we didn’t go to a atm. The next Sunday I made a point to get that money and his new allowance plus interest. What? You gave your son interest? Yeah why not… These are teachable moments. I gave him 25 bucks and he was so happy.
Now I’m sure he didn’t understand the interest payment, but I try to explain that If we borrowed money from the bank or lender they would charge us a fee for interest. Since he was 2 I have been teaching and joking about taxes. This is kind of a joke when people see it, but at the same time might teach him something. For example if we go to mcdonald’s and he gets a kids meal or whatnot, I might grab some fries or a chicken nugget and say taxed. I buy him a ice cream and before I give it to him ill take a bite and say taxed. haha Again I want to point out this is more of a joke but could be a learning moment.
Now I have mentioned the benefits of allowance that has helped teach our son about money. What about giving? I really make it a point if I’m with him and we see someone in need or a salvation army kettle bell to give him some money to donate. (one of my favorite pictures from our last trip to Portugal is of him giving some money to a lady in front of a church)
Life is good for us, he needs to understand that and help out other people in need. Sometimes he will bring his own money to donate to stuff when we go out. Walmart has those donation things where to money go’s to sick kids but you put the coins in and they spiral down the container and then do various things. He loves those and tends to bring some of his change every time we go to walmart.
He started school this year, and I tell ya they bombard you with stuff to buy. Those book fairs? Dam….. For about a week straight they will send him home with flyers of books to buy. We bought him a learning set to read, then the next day there’s another flyer. Hey dad I like this book, this book, this book etc etc can we buy it? Sure man, you can buy it. You have about 30 bucks in your wallet you can buy them all and have like 5 bucks left or buy one or two. You know what dad, I don’t want them. I rather have my money. Oh man did that put a smile on my face! He truly is learning about money.
He has lots of books, we go to the library often. Every once in awhile we will donate a couple of books he doesn’t read to the salvation army and buy a bunch of used books from them to restock up. Why pay retail? Used books are just as good and if you can save money while supporting a charity, why not?
I don’t know about you, but since winter started our son has lost 2 pairs of winter gloves at school already. It really bugs me. His school had their Christmas play last night, after the play we went and got him from the class room. While bundling him up one of our friends mentions that their kids always loses their gloves and has went threw 4 pairs so far this year. I told them that after our son lost his 2nd pair we bought another and told him this is the last pair we pay for. From now on if you lose your gloves you will be paying for half the cost of a new pair. Since then he has not lost his pair of gloves…. They looked at me shocked…….
I get that I may sound a little extreme, hes just a kid…… Well clearly it’s working and he’s learning to take care of his stuff because of it.
Those spur of the moment chocolate bars and kinder eggs at the checkout lanes, to get you or your kid to buy them? Yeah he will ask for them as well. Sometimes we will just buy him one other times I say you got your own money do you want to buy it? Most of the time he says no….
So in conclusion, I think giving your kid an allowance is a fantastic idea! Your kid is never to young, well maybe under 1 is…. There is a tonne of benefits of creating a allowance to give to your kids. They will learn a lot more about money if they have some. Do you give your kids allowance? how much? any chores? If you don’t why not?
Have a great day.
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.
This is fantastic. I love it 🙂
Our toddler is too young right now, but I have similar ideas that I want to use to encourage saving and investing. Another idea I have is a savings match. The idea is to encourage savings by increasing contributions — similar to how some pension plans and retirement plans work. So, if your son saves $5 by the end of the month, he can have an extra $5 added to the savings.
Great post. Keep em coming
Hey road thanks alot! A match is a great idea. When you mention investing what would you open? This is something i have been wondering as a basic savings account sucks to put it bluntly! Haha he has minor cash now but at birthdays he can get a decent sum of $.
I have gone with a couple of different ways to invest for our daughter. Details here: http://roadmap2retire.com/2017/02/recent-buy-baby-r2rs-new-portfolio/
Essentially going with index funds for RESP and a couple of stocks for Nest Egg Fund. Once she grows up a bit more, I am hoping to find new ways to teach and encourage her towards saving and investing.
That was the origin post, which doesnt have details of second stock. Here’s the quarterly update from Q3.
Hey road will check them out.
Totally agree! In fact I would ask them to invest a portion of the allowance as a part of an index fund (with family match and dividend reinvestment). I wish I knew all this when I was a child 🙂
Hey geek for sure. I wasnt taught this stuff growing up. I made pretty good money in middle and high school… maybe i got to look into a investment account for him
It’s great that you are starting to teach your kid at a young age and he really understands it. My kid is just a bit younger than yours and he’s no where close to being able to understand the value of the different coins.
I am starting to teach him though. Right now he has a piggy bank and starting to ask me to buy him books. Gotta ask him to pay for it soon lol.
Hahha Leo. Its true asking for them to pay for it stops all the book buying pressure. Once you start talking about the money or asking them what change makes a dollar they learn pretty fast. Sometimes the new designs in the coins throws him off, we aRe working on the sizes of the coins. Haha
Interesting idea! We are definitely going to look for ways and means by which our kids can learn about the value of money, savings and investing. They will have to earn whatever “pennies” they get though – no free lunches in London. lol
Hahha hey Enoch. I thought you were canadian? Or canadian living in london england? Great that you want to teach your kids the financial world. Got to start somewhere! Sadly there is no free lunches here either,I always got to pay.
100% agree, My kids are older now but we always encouraged them in similar ways as you. kids watch your every move so being a good role model helps as well. Great article thanks.
Hey steve thanks. Good that you taught your kids as well!
Very similar in my house. My kids get allowance every week and they are free to do whatever they want. They don’t need to do anything, the allowance is unconditional. They save majority of the money in Daddy bank as they will get interest every month for that. If they want to buy something I don’t think worthy, they have to decide if they want to buy it with their money. Half of the time they decided not to buy it. If they donate the money for some good cause, we match the amount.
Hey May, great to hear. I love how you matxh their donations maybe thats something me and the wife should implement. What do you mean the kids keep the money in daddy bank? Your husbands real savings account and get like 1% interest? Or do you guys do something else?
Daddy bank is just a way to teach the kids money management. They can choose to have money with them, or save the money with Daddy. Once they have $100 saved, Daddy will pay $1 every month as interest. We taught them to think the saved money as their hen laying eggs for them.
Oh ok wasnt sure if it was a registered account. Great idea!
My brother and I didn’t get an allowance growing up, and if I have kids I don’t think I’d give them an allowance either.
My dad put it plainly “I don’t charge you guys rent”. Sounds cold, but it’s true. Doing chores and helping out around the house should be a responsibility. As a family, we all need to care for and help eachother out.
Hey Troy, its definitely true. I understand the feeling why give him a buck or two if he’s living here rent free. Now when I say that I mean at the age 13 plus. I definitely wont expend rent from a 4 year old. The way I look at it is at 2 bucks a week or 104 bucks a year, that’s worth the education he is learning about money. I pointed out he basically gets allowance no matter what. Chores are just a way to pitch in around the house. There’s is always a ying and a yang right?
It is a good story about the gloves. Kids used to lost lots of gloves in school. I used to stock up dollar store gloves when my kid was in grade school. I will tell this one to every parent who is frustrated with the lost gloves issues.
Hey pell. Yeah its surprising how well this has worked since bringing this up to him!
I agree to every single word.
We started off by paying for every chore. Ended up in my son not doing anything and not getting paid. We then switched to allowance, but he has no option of not doing his chores. Seems to be working out pretty well. He has now saved up over $1000 – I wrote about it here, if you are interested.
Thats great to hear. Nice work parenting! My son is a saver as well. Its nice to see I was nothing like that.
Will definitely be checking your post out.