The kids are part of the family, they benefit from living there then they should contribute to the household. Plus someday they will need to take care of their own house without getting paid.

Allowances should not be tied to chores. If you do that then they will begin to get paid for everything.

Try it, watch. Soon you will be negotiating over everything you ask them to do.

Oh, and don’t give them a credit card. Even if it is prepaid.

I’ve never had a credit card debt in my 33 years of life. Although I have been fortunate enough to receive a few gifts and inheritance checks when I really needed them. Money hasn’t been a focus of my life and I suppose I’d disappoint a lot of parents (not my own) with my career decisions to date. I suppose I’ll be crushed by a younger money centric crowd later in life.

But, I guess if they chores or task are above and beyond what they normally do, you could compensate them.

Also, I wonder how you teach young children about work=pay without using allowance.

On another note, after reading the Money Savvy Pig entry I was inspired. I got out those canning jars and labeled them. We talked to our 2 yr. old and 4 yr. old about money, how we get, what it’s used for, and how to save. They each got an “allowance” (50 cents per year of age) and put 10% into the charity jar, 30% into the college savings jar, and 60% into the spending money jar. We also discussed that fact that their chores were part of family responsibility, not something that they were getting paid for and that there are extra (non-chore) jobs to do if they want to save up extra money for something.

This went over pretty well. My 4 yr. old gets it. The 2 yr. old is excited because his big sister is.

Thanks JD for great articles that are helping me teach my children about money, something that my parents didn’t do for me.

Let’s be honest…the plastic itself isn’t a problem. It’s when people use them improperly, such as for buying things they can’t actually afford. So perhaps this sort of early, restricted introduction is what some kids need to learn good habits?