Making Allowances for an Allowance
My kids, ages 7 and 5, have recently insisted that they are old enough to get an allowance. They were very persuasive – and committed to doing the requisite chores – so my husband and I agreed, but also wanted to instill some financial lessons through the process.
After listing the chores to be completed in order to earn the allowance each week, including first and foremost showing respect for other family members, we talked aboutthe four things that people do with money:
- Spend it. There is a continuing conversation in our home revolving around “need” vs “want.” And in my better moments we also discuss the values that we consider – who made this and how, is it “worth” theprice, can we get it used, etc. – when making a purchase.
- Save it. Each child has a wallet that, at the moment, serves as a savings account. I’m researching local banks so they can have their own passbooks (do banksstill do that?), earn interest, and physically get in the habit of depositing a portion oftheir gifts and earnings.
- Invest it. This I have yet to explain fully. Some of our family investments are in socially responsible mutual funds and I’ll encourage my kids to make thoughtful decisions. Any advice would be much appreciated!
- Give it to tzedakah. Each Shabbat before we light candles,we put money in our tzedakah boxes. Come Chanukah we set aside one night for tzedakah and decide together where our family’s box proceeds will go. Now we’ll encourage the kids to take a portion of their own money as part of our weekly tzedakah deposit.
Of course, as with many families, sometimes the above is more aspirational than actual. I’d love to hear about your own practices and goals.
Lisa Sacks 1994-95