My husband I have struggled over the years to figure out a family money system that works for us. We didn’t want to pay children to do their chores. They should just do them, right?! We didn’t want to give them money without any work involved because that didn’t teach them a major benefit of working hard. But we did want them to have experiences managing money, understanding what their wants cost, have a sense of ownership and learn to save for the future. After asking friends what they had done we still didn’t have a solution. I then turned to experts! Our system comes from the ideas and practical solutions presented in Dave Ramsey and Rachel Cruze’s book Smart Money Smart Kids and The Entitlement Trap by Richard and Linda Eyre. These are must-reads for any happy home!
First, we divided the day into four parts.
1.The first part is the morning routine. Everything the boys have to do to get ready for the day (brushing teeth, dressing, breakfast, grabbing their backpacks, etc) has to be done and they have to be ready to go at the appointed time to leave for school.
2.The next part of the day is when the boys get home from school. They have 30 minutes of a learning activity such as homework, piano practicing or reading books with mom (for the 5 yr old).
3.The next thing to be done is checking his assigned zone for the week. We divided our home into four parts (one for each boy). Each son is assigned one of these zones to check. He has to make sure things are put away in that room. He also does something to make that zone clean like vacuuming one day and then next day he could dust. We rotate the zones each week.
4.The last part of the day is the bedtime routine. The boys must do everything they need to do (get a drink, shower, brush teeth, pj’s, etc) and be in bed on time to earn money for this part of the day.
We keep the chart for each week on the refrigerator. There is a spot to mark off having done the work for each of the four parts of the day. On Sunday we go through the chart. If a son has done all his work (four check marks for each week day) he will earn 100% of the money he can earn that week. If David can earn $25 a week and he does all his work he receives $25. If he did only 50% of the work required he will receive $12.50.
To decide what each son can earn in a week we looked at our monthly budget for items like clothing and entertainment and roughly guessed what we were spending on each son. We decided to make the boys responsible for buying their own clothes and shoes, paying for entertainment like going to the movies or a football game with friends, presents for others and buying their own wants, like gum or toys. The older boys can earn more money because they have to buy all new clothes; whereas the younger boys get their clothes from the big brothers (one benefit of having all sons!). For example, our older boys can earn up to $25/week. This has worked for us, but you may need to adjust for your situation. Start small and give them “raises” if you see they really need more.
We have a “family bank” spreadsheet where each son has his own page. We have a column for the date, the amount added or withdrawn, the amount to savings and the amount to charitable donations. There is a running total and our sons can see at anytime how much they have. We require the amount to savings and donations to be 10% each.
When a son makes a purchase we subtract that amount from his “spending” column in the spreadsheet so he can see the money he has left. We’ve even had a son ask for another column so he can save for a big toy he wants and he wants us to automatically take that money out from his earnings each week! The good habits are forming now!
The most remarkable things have happened in our home since we instituted this system. Our bedtime routine used to make us crazy every night! It felt like it took hours to get the boys into bed. We don’t have that problem anymore! The boys are pushing themselves to get everything done so they can be in bed on time. The responsibility has shifted from us to them and that’s a huge difference.
We love seeing the sense of ownership our sons have now that they have their own money. When Ryan spent $60 of his own money on his new shoes he cared about them! When they got dirty he almost cried and he quickly washing them off. He felt ownership of his shoes which is invaluable in fighting the feelings of entitlement.
When David needed a new bike we told him we would match what he had saved for his new bike. He was so grateful! (We’ve also told them we would do this with a car) David set a budget for his new bike and shopped around. He was shocked to see how much bikes cost. Instead of “Mom, can I pleeeeeaaaase get this bike?” David had the responsibility of the choice. These are great decision-making experiences.
At the beginning of the school year David and I went shopping for new clothes. It was really hard when he saw how much things he liked cost and he realized he couldn’t afford them. Or if he did buy one he wouldn’t be able to get anymore. It was hard for me to watch this because, as a parent, I wanted him to have what he wanted. I’m glad I didn’t jump in and say “I’ll get that for you.” David and I went to different stores. We looked for coupons. We found sales. David ended up with many great items and, even better, a lesson learned in money management.
I love going to stores and having the children want something. They now look at the price tag and weigh how much they really want it. There is no longer the begging or constant “Can I have that or that or that?”
We believe saving money is important. To encourage our boys to save we give them interest on any money in their family bank account each quarter. We’ve decided to be more generous than a regular bank by giving them 10% interest. A family bank account has its perks!
We also believe it is important to do good things with the resources we have. Now that the boys have their own money they can experience the joy that comes from giving.
We also have jobs for helping around the house that the boys are just expected to do. For instance, two people are assigned to work together to clean up the kitchen. With six of us in the family each pair has two days a week to be responsible for. On Sunday we all pitch in! It’s nice to have a regular schedule for this. Everyone has a garbage he is assigned to take out the night before the garbage truck comes. The boys have to make sure their rooms are clean before they can have “screen time” (playing on electronic devices) or with friends after school. When you have a routine the home runs more smoothly.
We also have a list of extra jobs our boys can do to earn extra money. I do not enjoy cleaning the baseboards! That job comes with a big paycheck! David also mows the lawn during the summer and edges. He is helping around the house, earning extra money and improving a skill he can use to earn money from other people.
This works well for our family. We have young boys still. No one is driving or working outside the home yet. We hope this is giving them a chance to work hard and learn to wisely manage money. It is hard when Andrew, who is five, wants to spend all his money on toys. We do talk to him about it. We do make him wait a day to make sure he still wants it. And if he does we let him buy it. He is learning that when the money it is gone it’s gone! There is no line of credit in the family bank account system!
