When to start allowance

[La Bibliotecaria Feroz]

My kids are 4 1/3 and newly 3. They can more or less count.

Are they old enough for allowances? Especially Big Brother? The impetus for this question is that they keep dumping out their bubble solution and I wonder if it would help them be more conservative with their consumables (eg, bubble liquid) if they had a role in paying for it. Would they be less likely to break their toys or throw them over the fence if they were responsible for replacing them?

Should I or shouldn't I? What amount? Any stories about allowance with kids this young would be appreciated :-).

[GizmoTX]

How would they see any difference between you supplying money for an allowance & you supplying more bubble liquid or toys?

Don't replace the toys. Let them miss them. Then explain that it takes family work to provide them, & that they must take care of their toys to have them. They should be picking up their toys daily. After several days, reintroduce bubble liquid or whatever, & see if they take care of it. If not, make the time delay longer. If you supply any new toys, supervise the play, & have them put the toys away after play so they won't be destroyed. They need to learn that toys are a privilege & a responsibility, not just something that is always given to them.

[Mirwen]

I think it's time to start an allowance when they have a basic understanding of math and money.  Teach them about coins and dollars and let them add and subtract.  If they can do that, getting an allowance is a great opportunity to practice these skills. 

An allowance is not necessary to teach valuing items.  Not having the item he destroyed/lost is enough.  My son, now 5, was very destructive and threw many toys over the fence or smashed them to pieces.  It takes a while to understand cause and effect.  Just don't replace things right away.  Wait a few weeks or more to replace them.  When they ask, "where's my x?"  remind them what happened to it.  It does take several frustrating months or years, but if you are consistent, they will eventually "get it."  They won't get it if a brand new one shows up right away.  When my son intentionally breaks something expensive of mine I sometimes tell him, "This cost $60. I'd much rather spend that money on getting you some new toys or video game, but now I have to spend it on replacing this instead."  He understands that money is a limited resource and how this affects him. 

My mother-in-law has a great story about when my husband started receiving an allowance.  He asked if he could have an allowance and she said, "You can have an allowance when you can add and subtract money.  For example, if I have $5 and I ask you to split is with your brother, how much would each of you have?"  He said, "Two one dollars and two quarters."  He was 3 and started receiving an allowance.

[formerlydivorcedmom]

I started mine at 4.  They got $1 (in quarters) each week. 

About the same time, I also started taking away toys that were used to hit siblings or that were left out after the child was told several times to pick it up.  It cost 50 cents to get a toy back.

[StockBeard]

Our kid is 4, we're starting to talk about it.
As Mirwen mentioned, I think it works best once they get an understanding of basic math. I'd say 3 is too young, and 4 depends on how bright your kid is?

We'll probably wait until he's 5, I think.

[Insanity]

I started mine at 4.  They got $1 (in quarters) each week. 

About the same time, I also started taking away toys that were used to hit siblings or that were left out after the child was told several times to pick it up.  It cost 50 cents to get a toy back.

I love the penalty idea!

We have started to give our daughter (5) rewards in money instead of stickers.  We don't give her nearly as many toys or things and still have her donate things on a regular basis.

[pksr]

I think they're too young for an allowance, but I think you can start being very intentional about encouraging deferred gratification (treats, toys, any sort of rewards). We didn't start a money allowance until age 7, but to our surprise and delight our son had already embraced saving etc. because of years of non-financial lessons.

I think a lot of parents introduce sticker-based economies by age 5 or so - it's a nice interim step and a little easier to grasp.

[StockBeard]

I think a lot of parents introduce sticker-based economies by age 5 or so - it's a nice interim step and a little easier to grasp.

Can you elaborate on that? I can understand giving stickers to my kids when they do good stuff, but at what point is it ok to take those back? Or is the word "economy" here a misunderstanding on my end?

[pksr]

I think a lot of parents introduce sticker-based economies by age 5 or so - it's a nice interim step and a little easier to grasp.

Can you elaborate on that? I can understand giving stickers to my kids when they do good stuff, but at what point is it ok to take those back? Or is the word "economy" here a misunderstanding on my end?

Sorry - I meant stickers as a form of currency. We needed to reward certain behavior so gave him a sticker for a variety of things we wanted him to do. Once he had a certain number, he could cash them in - X for 30 minutes of TV, Y for 30 minutes of Wii, Z for a popcorn movie night, etc. I've talked to other parents who used tokens of one sort or another - anything like that (where each piece of "currency" has the same value) is easier for young kids to understand. Plus stickers are more fun than coins...

We eventually graduated away from the sticker economy, but it worked well for a while. It was more for positive reinforcement than saving (my son was 5 at the time) - he was always a little surprised when he could cash things in, so I don't think active saving was high in his mind at the time.

[StockBeard]

Thanks, that's a pretty awesome thing to do. I'll talk to my wife about it and see how she likes the idea :)

[GizmoTX]

We used stickers to record progress towards a goal starting with potty training. Next for daily chores. Then for math worksheet completion during summers to bridge the school curriculum. Stickers were so much fun for DS & much easier than money to track progress. At first he "cashed" the stickers in for specified rewards, such as a desired toy, game, or fun experience like an amusement park or zoo. Much later money was a reward choice.

[Maya]

Posting to read later and follow along as I'm wondering when to start with my 4.5 year old.

[arebelspy]

I'm planning on starting them $1 per week per age (I.e. $5/week at age 5) at age 2-3.

[kodokan]

Being able to add and subtract money is a good sign - one of my drivers for an allowance was to ward off requests for things in shops: 'Can I get THIS? *brandishes pointless plastic thing*'... 'I don't know, sweetie, can you? How much money have you got? And did you remember to bring it with you?' So the kid needed to understand monetary value, and subtract one from the other.

From memory, this got really solid about age 6. Until around 4 or 5, they typically think that more coins are better, and will choose 4 dimes over a dollar.

I've just hit a new budgeting stage with my teen and pre-teen, and introduced a clothes allowance. The teen gets it as part of a total allowance, to spend as he wishes - if he diligently shops the clothes sales and browses thrift stores, then he has more left over for computer games. This is a monthly amount, auto transferred into his bank account; he's been on a monthly rather than weekly allowance since he was able to get a debit card bank account at 13 (now 15).

The 11 yr old has separate weekly cash allowance (mostly spent almost immediately, on nonsense) and monthly clothes allowance at the moment. She's doing pretty well about budgeting the clothes allowance and understanding that even though it comes in each month (line on my YNAB budget), she needs to roll some of it forward for big annual purchases like a winter coat and boots, and that boring things like underwear need to be planned for alongside funky tops.

[ditheca]

We started allowance at 4, and it has been fantastic.  Plenty of stories for the mini-mustache forum, as our young kids save for purchases, evaluate trade-offs (expensive thing next month, or candy now), and unexpectedly spend a lot of their money buying things for each other.

[ginklord]

Have you checked out Smart Money Smart Kids? My wife picked it up for me and we've started introducing it to our three year old with good results so far. He now asks me questions about my work and how I get paid for it, and what we use the money for.

Here's a link: http://www.amazon.com/Smart-Money-Kids-Raising-Generation/dp/1937077632

- Matthew

[La Bibliotecaria Feroz]

Have you checked out Smart Money Smart Kids? My wife picked it up for me and we've started introducing it to our three year old with good results so far. He now asks me questions about my work and how I get paid for it, and what we use the money for.

Here's a link: http://www.amazon.com/Smart-Money-Kids-Raising-Generation/dp/1937077632

- Matthew

Thanks for the book suggestion. Big Brother's 5th birthday comes in late January and I have in the back of my mind to consider an allowance-related gift (like a piggy bank, or something like the neat envelopes this Mr. 1500 guest post for Frugalwoods:

http://www.frugalwoods.com/2015/12/07/how-to-raise-the-best-kids-ever-hint-almost-no-spending-required/

Both boys are showing rudimentary adding ability, so Big Brother may be ready.

[MayDay]

We started at age 3. A dollar per year. Maxes out at 5.

One kid was careful with it starting at 3. The other is almost 6 and still loses it half the time.

They have to pay for pretty much everything now that they both get 5$ a week. Ice cream, art supplies, random toys they want, book fair books at school, etc.

[MayDay]

And like a PP said, if we are in a store and they want all the things? I let them. Oops, forgot your wallet? Bummer. You want me to hold your money in my purse? Sure.

Even before they understood the individual coins, they could count dollars, and knew how to do the simple substraction of "I have 3 dollars, that costs 1 dollar", etc.

For my kids it sometimes stopped the wasting, but it 100% stopped the waste being my problem. You dump all your bubbles? (Btw mine do the exact same thing) you choose if you want to buy more. Not my problem.

[Maya]

Yeah I'm thinking to start DS who's 4.5 now. The other day he really wanted to ride an mall ride and we just told him no, but it'd be nice to tell him he can use his allowance if he wants to.

[Undecided]

I'm planning on starting them $1 per week per age (I.e. $5/week at age 5) at age 2-3.

We have been doing this. By the time our older son was six he was willing to give up all minor items and instead save every penny toward Legos. While that's a pretty good early step in understanding budgeting, it turns out that the money adds up really quickly---I'm not sure the amount is appropriate. My $.02.

[La Bibliotecaria Feroz]

I'm planning on starting them $1 per week per age (I.e. $5/week at age 5) at age 2-3.

We have been doing this. By the time our older son was six he was willing to give up all minor items and instead save every penny toward Legos. While that's a pretty good early step in understanding budgeting, it turns out that the money adds up really quickly---I'm not sure the amount is appropriate. My $.02.

I don't spend anything LIKE $20 a month on toys, art supplies, and treats for Big Brother. I will probably start him with a lower amount.

[arebelspy]

I'm planning on starting them $1 per week per age (I.e. $5/week at age 5) at age 2-3.

We have been doing this. By the time our older son was six he was willing to give up all minor items and instead save every penny toward Legos. While that's a pretty good early step in understanding budgeting, it turns out that the money adds up really quickly---I'm not sure the amount is appropriate. My $.02.

Thanks!

I don't think $240/yr is inappropriate, necessarily, especially if some is going to long term savings, but I'll think about the amount.  :)

[Maya]

My son is 4. I'm thinking of giving him $4 or $5 but half for long term savings, half for spending and should do a bit for charity. So that's where $5 works better, 2 for savings, 2 for spending and 1 for charity. I need to get better at donating to charity myself.

[Undecided]

My son is 4. I'm thinking of giving him $4 or $5 but half for long term savings, half for spending and should do a bit for charity. So that's where $5 works better, 2 for savings, 2 for spending and 1 for charity. I need to get better at donating to charity myself.

Please take this as a genuine question, which it is: What are you trying to achieve with the mandated long-term savings? I considered something like that and decided that absent choice, I didn't think I'd be developing my son's understanding of the tradeoffs between now and later.

[mxt0133]

We started my oldest on an allowance that was his age every week.  Then when I did the math $200 a year seems a bit high for a 4 year old.  So we decided that he gets $2 to spend and $2 in savings.  If he really wanted something that he no longer had spending money for then he can use his savings at the end of the month.  If he still wants it after a month then he must really want it and it is not just a impulse buy.  I am hoping that it will show him that by saving it will give him options and teach him that there are alternative to instant gratification. 

We still limit the things he can buy with his spending like no flame throwers, ninja stars, or gallons of ice cream but for the most part we give him freedom to spend it as he wishes.  I really have to bite my tongue when he buys the small plastic toys that just gets lost, but my strategy in the future is if he gets a toy he will have to give something up, because we literally are running out of space in the apartment, but we aren't there yet.

[Trouble]

It's wonderful to hear the different money strategies for little ones. I have a 3 year old (almost 4) and I use the "did you bring your wallet with you?' question to quell requests for toys and juice. His money currently consists of coins he conveniently 'finds' in my wallet... ignoring the notes thank goodness.

He recently had $10 in coins burning a hole in his wallet and we were off to the toy store while out shopping.
"I want this"
"Sorry buddy that's $50, it's more money than you have"
"I want this"
"Sorry buddy that's $110, a lot more than the money you have"
"I want to spend my money!" <pouty face>
"I know buddy, how about I teach you to save so that you can buy that garbage truck you want"
"Yaaaaaay"

Next day he buys an overpriced juice at the indoor playground. So he has an idea of money, but not value although I am conscious of the little teaching opportunities that are starting to crop up.
I reckon I might start an allowance next year when he starts 4yo preschool or maybe when he is 5.

[arebelspy]

My son is 4. I'm thinking of giving him $4 or $5 but half for long term savings, half for spending and should do a bit for charity. So that's where $5 works better, 2 for savings, 2 for spending and 1 for charity. I need to get better at donating to charity myself.

Please take this as a genuine question, which it is: What are you trying to achieve with the mandated long-term savings? I considered something like that and decided that absent choice, I didn't think I'd be developing my son's understanding of the tradeoffs between now and later.

The lesson won't click at first, but when they keep putting away money for long term as a habit, they learn that's just somethign you do.

And then when they want a bigger item later, you can say "wow, look how much you have in long term savings, you can use that" and let them use it.  Then when they want another big item "oh, not enough in the savings, let's start saving more into there" and repeat.  It's a process, but I think teaching them explicitly how to save (via mandating it at first just to show them how it works) is important.