Allowances for Kids?

With the approaching start of the new school year, I've been thinking about a lot of different things I should start implementing at home with Emma. The one I plan on blogging about tonight is allowance.

Emma is 4 years old and lucky for me she is sweet and doesn't throw a tantrum everytime we're at the store and I tell her NO when she wants a new toy. Although there have been numerous occasions when she pouts and sulks...at least I don't have to deal with a screaming child! I think she's at a good age to start doing some chores and having responsibilities that she can earn money for.

I've been doing some research on allowance for children and chores for certain age groups. What all my research shows is that all kids are different and some might be able to do a certain chore more easily then some blah blah blah. And parents all have their own opinions on allowance like how much to give and whether or not it should be awarded for chores or given to teach financial skills. So, I've sort of made up my own guidelines for allowance.

This piggy bank is super cool and I haven't bought one yet but am seriously thinking about ordering one. Although, as ya'll know, I'm rather cheap and I think I can have the same effect by using 4 plastic cups with labels. I have a feeling I'm going to save me the $17 and use my plastic cups I have in the cabinet. Either way, you want to make sure you have 4 different spaces for the money: one for saving, spending, donations, and investments. The one for saving, is money you collect for something special...say a new Leapster game or action figure. Something your child wants, but will take a little while to save up for. The spending section is money that your kid can use right away. Like when you go to the store and your daughter wants a gumball out of the machine. She can use money from the spend section of her piggy bank. Donations is money collected and sent to a favorite charity or to your local USO or even use it for church offering. Investment is money saved up for, in Emma's case, college. You can use it for a car, wedding, vacation, etc.

Now that I've explained what the piggy bank is for let me tell you how much money I think it's okay for allowance. With Emma, since she's 4, I'm going to give her $4 a week...if she earns it. I think a dollar for every year is a good start. She must complete her daily chores and responsibilities to earn the $4. Her list is making her bed, getting dressed, brushing teeth, doing her school work (I'm teaching her basic pre-k skills at home since I did not enroll her in a pre-k class this year) picking up toys. I think I'll have a special chore like on Monday nights she needs to help gather trash in the bathrooms. Since that's not a everyday thing, it will be a special chore just like helping out with laundry.

There are rules. She has to put in a dollar for donations and a dollar in investments each week. She can put however much in her save and spend slots as she desires. I don't think I'll have a problem with her skipping out on her chores/responsibilities but if she does then I won't pay out the full $4. Of course I'll give her plenty of encouragements to get them down! I also plan on teaching her about deals and bargains, etc while actually out shopping. A good example would be comparing a box of cereal or a can of green beans with it's store brand.

I'm hoping to teach her that everything costs money. I want her to learn that you have to work to earn money. My biggest wish is that she will learn financial skills by the time she's a teenager so she doesn't grow up in debt or worst a spoiled brat!