Years ago as my oldest 2 were starting to become aware of money I scrambled to come up with a plan...."When do we start paying allowance?...Do we pay allowance for chores? How do we keep track of their tithing? Who keeps their spending money? Do they need wallets? "
To answer these questions I devised a system that worked for the last few years. First we decided that we DO NOT pay our kids for chores. Doing chores is a part of living in our family and we are all expected to help out. Next I purchased pencil pouches for each kid that had 2 zipper pockets. One was for their tithing and one was for their spending money. We kept these pouches in a cupboard in the kitchen but they were usually loose and shoved.
The older they got the more they just helped themselves to their spending money and eventually they just kept their spending money in their rooms or in their wallets. This has been working, but lately has been falling apart. First I must admit that I haven't been as diligent in paying them their allowance at the first of the month. So for weeks and weeks they keep asking and asking and usually the Mr. pulls the allotted cash out of his wallet and hands it over. Tithing getting paid... but not in the "lets figure out what 10% is" kind of way, but the "a dollar or two should cover it" kind of way. I really want my kids to understand the concept and knew that this wasn't going to achieve that goal.
Combine all that with my older boys approaching teenage hood and the possibility of earning more than just the allowance that we pay them I knew that it was time to revamp the plan.
Here were our new needs:
- still providing a place for them to store their tithing until they fill out their slips and pay it (10% of all income)
- get the kids started on adding to their own savings account instead of just us (10% of all income)
- teach them about saving up money for more expensive items they want while still having quick spending money
- teach them how to keep track of their money by learning to fill out a bank register
I saw a picture on Pinterest that sparked my new idea. It was the idea of a Family Bank!! The idea behind the bank is that all our kids would have a central place for their money. They will have a place to store their tithing, to store their savings until we deposit it into their real savings account, and a place for spending money that works like a debit account.
One of the troubles that my boys have been having is that they really want to save for things that cost more, but when that blasted ice cream truck comes around they quickly blow through any money they have access to with out thinking.
Time for a change...
First I went to the store and bought a binder and after a little searching I found the type of pencil pouch that I needed. I wanted one with 3 separate zippered pouches. These particular pouches have 3 ring grommets to put into a binder and have 2 pockets on one side and a larger one on the back. I purchased one for each of my kids including the younger 2 (they don't need them yet, but how many times have I found the PERFECT thing and only purchased what I needed for the older kids and then when I needed it for the younger ones I can't find it anywhere!) I labeled each one with the kids name and then labeled each pocket. The front two pockets are for tithing and savings and the back pocket is labeled spending.
Here is how it works:
We pay our kids $1 for each year they are old, once a month. So my oldest is 11 and receives $11 a month. When it is time to pay allowance I get it all in cash and even get the necessary dollars in coins so that they can pay their tithing and savings exactly. So for my oldest I set out $11. $10 in dollar bills and $1 in coins. We sit down together and open up the Family Bank binder. He puts $1.10 in his tithing pouch, $1.10 in his savings pouch and then the remaining $8.80 is left for spending. He then decides how much he wants to put into his spending pouch and how much to put into his wallet. This can be different each month. The idea behind this is that the money placed into the spending pouch works like a debit account. The rest is wallet money that can be spent willy nilly on all the ridiculous ice cream or otter pops from the corner stand he wants . Before withdrawing from his spending pouch he has to come to me (his "debit card" mom) and request to take money out. I created sheets that look like a check register where they record all deposits and withdrawals. This extra step helps them think first if they REALLY wants to spend it. If they do it is their choice.
Because all deposits and withdrawals are recorded my kids are really able to see where their money comes from and where it goes. Every time they earn money they go through this process....tithing, savings, and dividing up their spending. Sometimes they want all their spending money to be wallet $...that is totally fine.
My hope in doing all of this is that by the time my kids are ready to be on their own they will have the knowledge they need to manage their money wisely through paying their tithing, saving, and learning to spend properly!
I love love love this!!!