I wanted to share with all of you how my parents handled allowance for me and my sister growing up. I plan to do it with my future kids too because it taught me so much about money and really set me up for future success.
It started from the age we were 3, it never depended on chores (they were not optional and therefore not linked to money).
Every week we would get the same amount of money as our age. So when I turned 3 I got $3/week. When I turned 4 I would get $4/week and so on.
The catch was that we had this cool bank that looked like a stop light with 3 different sections. The red section was for invest, the yellow was for save, and the green was for spend. There was a zip tie on the red section and we got to take this money out on our birthday, count how much money we had saved throughout the year, and then our parents invested it in mutual funds for us. Save was for the new bike, computer game, or other big purchase for a 4 year old (Bratz dolls anyone?). Spend was for candy at the grocery store, something small that we wanted when we would go out with my parents, etc.
We had to do this with ALL of our money: allowance, Christmas and Hanukkah Money, birthdays, etc.
When we would go to the store my mom would ask if we wanted to bring our money. When I wanted the candy bar at check out, the answer wasn't "no" instead, it was "well do you want to spend your money on that?" I thought about it and would rather keep my $1 that would take another week to earn.
When I turned 21 my parents gave me the mutual funds they had been saving (~$5k) and I was able to fund my RothIRA for that year.
This was such a fun way to learn about money and the value of it. When we were school supply shopping she would ask if I wanted the crayola markers for $2 more than the store brand? When I understood a little bit more about money I opted for the store brand.
While I still use the concept of Invest, Save, Spend my percentages are a little bit different now as an adult, but the mindset still remains.
How did others use allowance growing up?