You mentioned that your kids earn half the money to pay for their American Girl Dolls. How do your kids earn money? Do you believe in allowances?
I know the allowance issue is one that every family has to decide for themselves what they will do. There are pros and cons to each side, for or against. We do not give allowances but we do provide ways for our children to earn money. We want them to be able to learn how to handle money properly while they only have a little so when they earn a lot they’ll be better prepared to manage it. Better to accidentally waste $75 now instead of $7,500 down the road right? We also want to teach them that money is not a handout, it must be earned through hard work.
All of the children have household chores they are expected to do. They are not paid for those. In a way they are paid to not watch TV or play on the computer. They each get TV and computer coupons that they can use throughout the week. Written on the coupons are various money amounts. If they don’t watch TV or play on the computer they can turn in those coupons at the end of the week and receive the amount written on them in cash. It’s not much, about $5 per week, but it does add up if they are smart and use their time for something more useful!
There is an ongoing list of projects that need to be done around the house that we, as parents, are willing to pay the children to do. We put a fair “price” next to each project. When a child wants to earn money they’ll read over the list and initial whatever projects they want to work on. We pay them after the task has been done properly. One of the perpetual jobs they can do to earn money is to match socks. It seems we always have a basket full of unmatched socks! My little Fudge really loves to earn money this way. She earned $30 one month just matching socks at 10¢ a pair. Um, that’s a LOT of socks that needed matching. It was the winter-time and the girls were wearing at least three pairs of socks when playing out in the snow. They’d put on new pairs each time they went out because the others would get wet.
When the girls earn money we teach them to split it as follow:
- 10% tithing
- 20% Long term savings
- 20% Short term savings
- 50% Spending
Tithing goes to our church, long term savings are for things like college or missions, short term savings are for those things they want that still take some time to save (one month – a year). We will pay for half of an item depending on what the children are saving for and how much it costs. Its very subjective. We’ll help pay for a horse or American Girl dolls but not for clothes or video games or even i-pods. If they want those bad enough they’ll have to save for the full price on their own. The older the child the more they are expected to buy and pay for their own things such as clothes, shoes, listening music, piano music, sewing supplies, books, etc.
We loosely follow the suggestions outlined in “The Family Economy” by Richard and Linda Eyre. I say loosely because we have changed it so many times until we’ve found what works for us but the underlying principles are the same.
Now the three older girls want to earn a little more money so they have created their own etsy shop called Sprinkle Sunshine. Isn’t that cute? They hand make items that will bring a little sprinkle of sunshine to brighten someone’s day. The girls are learning about investment, how much their time is worth, overhead costs, and everything else involved with having your own shop. So far they are having a great time!