We’re starting Douglas on an allowance. Jenny looked at a lot of advice online before we decided what to do, and I think we’re happy with this approach.
We’re hoping that he’ll learn about saving, the value of delayed gratification, and charity from this, but maybe that’s too much to expect of a four-year-old.
Douglas gets $4/week ($1 per year of age), independent of chores. He has four banks into which he puts his money:
- 25% that he can spend any way he wants (it’ll probably be candy for a while).
- 25% for charity (church tithe or Ethical Society contribution each week, or another charity)
- 25% for short-term savings (he’ll be able to take money out once it’s been in for a month or so; this isn’t fully defined)
- 25% for long-term savings (theoretically for college)
We saw some schemes in which parents gave the child choice on which bank to use and supplemented with matching funds when the child chose something other than spending money. I like the idea, but I think it’s too much for a four-year-old.
Does anyone have experience with these approaches? Other thoughts?