Week #1 and #4
—Long Term Savings: In these weeks, I physically put that amount aside until the day comes when we have time to deposit to their accounts at Sikorsky Credit Union. I assume this will be saved for college or something deep into the future, and outside of their CHET account (yes, we have that.) They are required to join me on my trip to the Credit Union and have done pretty well with this. Honestly, they probably have more liquid cash than I do, if I don’t count what my savings is marked for. I’m extremely proud to say they have never asked to make a withdrawal, though this is not top of mind for them.
Week #2 and #5
—Share: I believe in the importance of charity. In these weeks, their allowance is put aside and at the end of the year, I write a check to the charity of their choice. My older son has become very passionate about the Stratford Cat Project, and we even adopted our own cat from that organization. My younger son adores owls and puts his contribution toward the Connecticut Audubon Society. Maybe this year we’ll finally see the owl he has partially sponsored.
—Short Term Savings: I put that money aside for the short term until there is something they REALLY want, at which time they can withdrawal from the “Bank of Dad.” Both kids know they can access this money anytime to make bigger purchases and only my older son has ever taken a withdrawal and it was for something he really wanted to save up for. I’m extremely proud of both of them for having great control.
—Spend Now: This is what you expect. They get cash from me and might spend it on the ice cream truck, or stickers, Legos, or whatever they want. In recent years, they have exercised pretty good restraint with this, after they learned the lesson of what happens when the money is gone. In between, there is gift money, which I generally save for them. Sometimes, other relatives give small cash gifts or the kids will earn a few dollars shoveling snow in the winter and running a lemonade stand in the summer. When they earn money, they have free rein to choose what to do with it, and believe it or not, they often choose short or long-term savings, which shows I’m doing something right! As they are getting a little older, I have to consider whether they should earn a raise to their allowance or not. While I’m not sure, I’m sticking with this system as it is working very well.
(Photo Source: Father and Son
I’m going to let you in on something—how I give my elementary school age kids an allowance. For their sake, I will not tell you the amount here. It isn’t that much, and I don’t want to dwell on dollar amounts. You have to find your comfort zone on that based on their contribution to the household, and age should also be a consideration. This is also not a discussion piece on whether a kid should get an allowance for simply breathing, eating the last of the bread and not emptying the dishwasher. The allowance in my house does come with the expectation of doing things like emptying the dishwasher. Breathing and eating the last of the bread (and most everything else) are givens. What I don’t do is hand over some green and say “good luck.” In fact, my kids only get to physically keep their allowance once every six weeks. Below is how our six-week cycle works.