Simplifying Allowances

One of my weekly Saturday chores is paying the boys' their allowances.  It was on my 20 in 2020 list to start paying Luke an allowance, which we did with some regularity but then fell out of the habit, although I was accruing an "allowances payable" for him in my financial software so that we would at least know how many he was missing.   It took until about 6 months ago, well into 2021, that we really got in a good routine for paying allowances and now Sam gets one too!

Teaching our boys good money habits is one of many things we want to instill in them.  If they don't have money to spend as kids, they'll make more money mistakes when they are older when the stakes are higher.  Plus, I really don't want to them constantly asking me to buy them things at Target or wherever.  Now the answer is simple.  I am not buying that for them besides as, maybe, a future gift, but they can spend their own money, if they have any to spend. (We will pay for things for them in store since they rarely take their wallets on our regular shopping trips, but only if I know they have enough back home to pay me back immediately.  And then I make them pay me back before they get said item.)

A big reason they never got paid on time is that I never had the right bills or coins on me.  So that needed fixed.  Our bank, where us and the boys have accounts, does a pays for A's program where Luke can get $5 if he has an A (or equivalent, when he was on O's and S's until this school year) on his report card.  Now I had a reason to go to the bank every quarter.  And that is the 4 times a year I go to the bank.  When we got the school calendar I wrote the 4 report card dates in my planner and that is when we go.  Any checks I get myself wait until then. (I suppose if we got a large enough check, like when Matt's work has reimbursed us for work trips, I'd go sooner...but we haven't had that in years.)

Before those roughly quarterly bank trips I count out how many weekends there are until we'll be going again.  I multiply that by what I pay out in allowance a week and that is how much I withdraw from our account in $1s.  I also might get a roll of quarters and/or dimes to help make the change I need for their allowance splitting.

We have been pretty consistent over the past 6 months to pay allowances on Saturday afternoons.  I want them to have their church envelopes ready for when we go to Saturday night or Sunday morning Mass.  But as much as I wanted them to have their envelopes I was also usually dragging my feet because I was pulling items from about 4 different spots in the house.  I kept the allowance money in one place, their church envelopes in another, their piggy banks and savings bags in a third, and their wallets in a fourth.  This was crazy and annoying.  

What matters?  

Teaching them good money habits.  

What else matters?  

Making it easy to do weekly.

I had really helped that along with getting the right cash from the bank so I finally realized I could put almost all the allowance items in one place for easy grabbing when it was time to pay.  Here's where I ended up!  We have both of their piggy banks (where they mostly keep change (they, strangely, have almost matching banks.  One being mine from childhood and the other one they got as a baby.)), their wallets (where they mostly keep bills), their shared box of church envelopes, their savings bags, and the money I use to pay.  It gives me a weird sense of joy to have a good system for this now, something that has been annoying me for months!

Right now they each give 10% to church and put 50% into their savings account.  This means they keep a whole 40% of their actual allowance (which is the same system my parents used when I was growing up!) but it still keeps them with a weekly stream of cash.  They each have a labeled bag for savings money and we take those to the bank on our quarterly trips.  They've only deposited the bills so far so we don't have to mess with their little bit of change in the change counter.  Plus, we are constantly using that to make change so it usually amounts to under 50 cents anyways.  

Now on those Saturday afternoons I can just grab the whole box and have them paid out within minutes.  Luke knows how to count and make basic change.  Sam doesn't yet but he's slowly learning a bit more!  

The boys, mainly Luke, can earn more by doing extra chores like mowing (he LOVES mowing) or shoveling (loves that too) but we try not to tie their allowance directly to their normal chores.  Chores are part of living here and we all have to work together to keep the house clean and functioning.  Their allowance is part of learning about money.  I don't know how well they understand that separation but we try!

If you are looking for guidance on this I highly recommend this book, The Opposite of Spoiled: Raising Kids Who are Grounded, Generous, and Smart about Money by Ron Lieber.  Even getting a pretty good financial education from my parents AND being a professional accountant, I still learned a lot about how to teach my kids about money!  

I still remember the pride and joy I felt as a kid when I had finally saved up my hard earned allowance for something I really wanted.  It felt so grown-up to have my own spending money.  And I see that in my kids too, then they are able to make their own purchases.  It's teaching them about savings and choosing carefully and also just the basics of counting money!  And I get less whining at the store for random purchases which, really, might be the real win of it all!

Do you pay your kids allowances?  I'd love to hear what kind of system, I just find others' processes so interesting! 

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