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Our family definitely has the budget thing down. We may not always do it perfectly, but we’ve got a plan and we know where our money is! Our hope is to pass this skill on to our little ones. Too often children head off to college with no concept of how to manage their finances, myself included! (I’m still sorry about that credit card bill, Dad. But at least I learned from it!)

Kids and Allowances. How to create healthy money habits in our kids with Save, Spend and Give Jars plus free printables from Fresh Mommy Blog!

While we are not at the point that our oldest can manage his monthly needs, we do want to make sure we get there eventually. We decided that Max’s 4th birthday was the perfect time to start a weekly allowance. Partially because we feel he’s old enough to comprehend, partially as a rite of passage, and partially because the “I wants” have set in… You know what I’m talking about.

I love getting Max something he wants, but I also don’t want him to think we’re going to buy him every little thing he asks for (that’s what Grandmas are for!). A little before this past Christmas he started wanting a new toy every time we left the house. We had a good answer then (“put it on your Christmas list!”), but now I feel that we have a better answer. If he sees something when we are out, we check the price and see if he has enough money and talk about his options.

My husband and I did some research on kids and allowances and came up with our family Kids and Allowances Rules:

  • $4 per week 
  • $.50 in Give Jar, $.50 in Save Jar, and $3 in Spend Jar
  • No parental denial
  • Food stipulations

Max is 4, so we settled on $4 per week. We’ll up it at age 5.

We aren’t allowed to explicitly tell him no, but we do let ourselves remind him of items he has at home. For example, last week he wanted a firetruck, so we reminded him that he has about 15 at home. Did it change his mind? No. But we didn’t want him to get home and regret his choice. I’ll admit, this rule is really hard for me. I know my kid and I know he’ll buy a new firetruck and play with it for 2 days and forget it. However, letting him make his own choices is very important to the process. If he doesn’t make a few mistakes, he won’t learn anything.

Now, if he buys a treat like the M&M’s he bought this week, we will give him stipulations like he can’t eat them until after lunch, dinner, ect. At some point he won’t need this rule, but he’s still only 4, so we’re keeping some control here!

Another thing we talked about? Chore expectations. We are not equating his allowance with chores. Now, before you tell me I’m crazy, it’s not that we don’t expect him to do anything. He’s got plenty of jobs around the house including feeding the dog, cleaning his room, and putting his clean clothes away. But we consider those to be expected family contributions, not something he does just to get paid. As he gets older, we’ll allow him to earn extra money through other jobs, such as washing our cars or weeding the flower bed -things that he’s not normally expected to do. But his family contributions will also increase as we want to teach him those normal day to day jobs that help keep the household running.Kids and Allowances. How to create healthy money habits in our kids with Save, Spend and Give Jars plus free printables from Fresh Mommy Blog!

I wanted Max to have his own jars where the money in each one was visible. Since I couldn’t find any for purchase that I liked, I made my own using Tabitha’s pantry labels on mason jars. They’ve worked great and Max loves opening each one and putting his money in! Kids and Allowances. How to create healthy money habits in our kids with Save, Spend and Give Jars plus free printables from Fresh Mommy Blog!

Since we’ve been using this plan for a couple months, I can tell you that it definitely seems to be working. Max is understanding limits more and the “I wants” seem to be tapering off now that the consistent response is “How much do you have in your Spend Jar?”

Some of the other perks of the allowance are that he loves to count his jar, so he definitely getting practice of that! And we’re slowly working on the concept of 4 quarters making a dollar, but that is going to take him a little more time. I really love the small, basic financial conversations that this has opened up with him. And now that Max’s Give Jar has a few dollars in it, we’re letting him choose whether to donate to church or our sweet friend’s Nepal Earthquake Relief Fund.

What financial tools do you use with your kids that I should know about???

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