ul wrote: I mean each member of a family has some responsibilities, feeding a pet, helping with every day life ( setting the table, dusting, fetching the paper, clean out the dishwasher etc) is not a chore, it is part of living together.
I never found that argument convincing as a kid. My parents may have volunteered for their position as my roommates, but I was drafted into my position as theirs. (Don't worry, the trauma has receded in the meantime -- on both sides of the deal.)
We started giving our son an allowance when he started first grade. It was just a dollar or two, and tied to a couple of very basic chores...bring in the newspaper and give the dog fresh water in the morning. Slowly, as he wanted more money, we added another chore or two. Now that he is 12, his chore list contains about 8 items, all pretty simple. Set the table for dinner, carry out the recycling, etc. Some things, like cleaning his room and putting his dirty clothes in the laundry basket, don't count. We all have to do those for ourselves.
The most important thing we've done is teach him the value of saving. From the very beginning, we've told him that for every $50 he saves, we will match it with $20. As luck would have it (his luck, not ours!) he has turned out to be a very good saver. He doesn't like spending money, he'd rather keep it. Even if it's Christmas or birthday money, or when he earns it for selling Boy Scout popcorn. He spends a little, but saves most. When he had accumulated his first $100, we took him to the bank to open his own savings account. We always showed him the statements and pointed out the interest ("Free money! Yay!") he had earned. Of course, it was only 1 or 1-1/2 percent, but he thought it was too cool.
When he accumulated his first $1,000 in the savings account (around age 8 or 9), we took him to Edward Jones and had him invest it in a bond fund making 6.5% interest. The rep did a very good job of explaining how much he would make every year at this rate. He left there saying, "I don't think I like banks anymore!"
When he accumulated another $1,000 (last year) we took him back to Edward Jones and had him invest it in mutual funds, explaining the wisdom of investing both in stocks and bonds, and why funds were less risky. He grasped the concepts immediately.
We have all talked about it, and he now plans to take $100 later this year and invest it in one stock. We will show him how to read the listings in the newspaper so he can track it's worth.
He thinks he is saving so he can buy a car when he gets to 16, or help pay for college. Actually, we will probably do those things for him and encourage him to continue to save that money, but we're not telling him that.
Do you realize what $2,000-$3,000 could be worth by the time he reaches retirement age if he leaves it alone and reinvests all the dividends? It will pay for his retirement! I can't think of a better gift we could give him.
Wow - you have a very smart kid!
That's great, Eva!
I really like the matching idea. (Learning a lot of good stuff here, thanks everyone.)
I received an allowance as a kid, and I give an allowance to the girls. It isn't tied to chores or given/taken away as part of a reward system.
I started putting a penny/week into their piggy banks when they were one, a nickle/week at two, dime/week at three, quarter/week at four, 50cents/week at five and then $1.00/grade year/week starting in first grade. By the time they discovered 'shopping' they had almost $100 saved up.
K is a spender and M is a saver. K recently got started first job and has a whole new outlook on spending. She's much less likely to spend money she's earned than she was to spend money she was given. Still, learning that you only get to spend it once and saving for something she truly wants is a good lesson learned from a young age.
Kids are smarter than you think.
My son is now learning pre-algebra, German and Spanish in school. Why wouldn't he be able to understand basic economics as well?
FYI, he now gets $10/week allowance. He is required to donate $1 of that to church every week or another good cause of his choice. We have always insisted he give back a small portion of his allowance to those who need help. That lesson is more about "heart" than money, though.
i would say that kids around 6 to 8 should get $3, and kids about 9 to 11 should get $4, and the teens should get about $5 or $6.
I got a quarter for the week, up until I got a job at sixteen, which was in 1957.
