As children age, their awareness of money becomes greater.  They begin to notice the adults in their lives paying for things with some form of money, be it cash, checks, or credit/debit cards.

And they begin to want some of their own.

Whether it starts out because they want a certain toy and you say no and they realize if only they had the cold, hard cash to buy it with, then they wouldn’t have to go through you (faulty reasoning though it may be) or whether they begin getting cash for Christmas and birthdays from relatives and realize they can buy their own presents with that money, at some point they become aware of the fact that their WANTS could become their POSSESSIONS if only they had MONEY (again, faulty reasoning, but foolishness IS bound up in the heart of a child).

From this stems the discussion of an allowance and whether or not the children of the home have full reign over their money or do mom and dad still have some control?

And what about chores?  Or odd jobs?  Do you pay for those or are those expected work as part of the household?

This is such a personal discussion and decision, I don’t want to tell you there is one right way, but over the years we have been asked all of these money questions and more from other parents and I thought you might be interested in how we handle the finances of our children.

1.  We do not pay an allowance. Since we are raising adults, we take our reasoning from the adult world.  Most people do not get an allowance.  They work for their living.  Therefore, our children do not get “free money” either.

2.  We do not pay for chores. Again, taken from the adult world…anything that is part of the normal day-to-day operations of the household are not compensated monetarily.  I don’t get paid for cooking the meals and changing dirty diapers and my children do not get paid for washing the dishes and taking out the trash.

3.  We DO pay for jobs that are above and beyond the normal household duties. For instance, we pay for cleaning out the garage, washing the car, babysitting for more than an hour, and doing any job we would have to pay someone else to do.

4.  We pay for any little businesses our children are trying to create. My children give foot massages to their poor achy mama and their daddy pays them for it.  It’s not a booming business, but we feel that if they work hard at something in the effort to make a little money on the side, then that is a noble cause and worth payment.  I also pay them for any blog work that I need done and they are capable of doing.  In the adult world, this is called being a Virtual Assistant and because I would have to pay to have this done, I am willing to pay them.

5.  They are expected to help pay for WANTS. As they reach adulthood, we will ask that they help pitch in with NEEDS, but for now, they are required to pitch in with WANTS.  So, my son’s Space Camp fee (at the most incredible Space Museum on the planet – and who’s CEO is a homeschool dad of 9) is a WANT and something our son must provide half the cost of.  We do allow these types of wants (like my daughter’s new camera) to be given as gifts or gift money to go toward them, but our philosophy is that a WANT means so much more when you had to work to pay for some of it.

6.  They are expected to be generous. Whether that means they pay for an occasional ice cream for little brother or they pitch in with the Samaritan’s Purse shoebox, we expect them to not be tightfisted when it comes to their money.  We want them to be fiscally responsible without being Ebenezer Scrooge.

7.  We hold on to their money until they are 7-ish. When Christmas or Birthday money comes around, we, as parents, take control of that money and store it away for them.  If they want something and that want is reasonable, then we dole the money out accordingly.  We don’t really have a set age when this ceases, I just said 7-ish because my 7 year old does take care of her own money now.  My 5 year old son does not.  The reason we do this is twofold:

1. Young children are notoriously irresponsible.  Piggy banks become something fun to play with around here, so if the parents take charge of the money, we can be assured the money is safe from floor vents and baby’s mouth.
2. Young children need a lot of guidance on what to use their money for.  They seem to be unaware of the fact that they already own a whole truckload of toys.  Mom and Dad know much better where their money needs to go.

8.  When it’s gone, it’s gone.  We don’t do loans. Again, looking to the adult world…we live debt free and it is our belief that teaching children that mom and dad can “float them a loan” teaches them to be impatient and irresponsible.  This kind of thinking leads to Pay Day Loans and bad credit with bills they cannot pay.  Debt is a curse.  Even when you are 10.

9.  Family finances are not a secret. This past summer vacation, we required our son to tally up every single receipt along the way in order to get a grasp of how much it costs for our family of 8 to go on vacation.  We did this in the spirit of TANSTAAFL (see Whatever Happened to Penny Candy for more info on this rather useful acronym that stands for There Ain’t No Such Thing As A Free Lunch).  It is important our children understand the value of a dollar and just how much their everyday lives cost.  Yep, goes back to that adult world again!

10.  Money is NEVER more important than people. Ty and I have always made an effort to put people before money.  When my father was sick with Alzheimer’s and we lived 3 ½ hours away, my husband was adamant we be available to head back “home” at the drop of a hat.  Many people made fun of our “burning up the road,” but my father was more important than the almighty dollar.  The money to make one more trip was always there.

And that, folks, is my humble $.02.