Allowance: Early Childhood & Elementary Years

Birth to three, four to six: organic opportunities to teach about currency exchange.

Discovery is part of learning about money & value.

Before jumping in, read an overview of the whole strategy and find your child’s nature.

 

Happy baby discovers smiling as currency.Discovery & Curiosity: birth to 3 years is characterized by discovery and massive developmental leaps, something that doesn’t come around again until early adolescence. Your children will need you to be in Assurance all of the time. To teach them kindness, you’re kind, for example. You’re modeling affection, stability, sharing, compassion, and many, many other positive behaviors. In infancy this is all you do, but as children become toddlers and begin to understand cause and effect there becomes an opportunity to experiment with rewards like stickers and other little items. Money is best put into a piggy bank, first by you then by your child, and larger gifts should be set aside until they’re older.

 

Playing with money & purchasing.Play & Competition: kids from 4 to 6 are fun, playful, and naturally competitive. Playing games introduces them to rules, winning, and losing graciously. When in Assurance you’ll demonstrate the rules of fair play and sharing. You provide your kids with food, clothes, shelter, entertainment, and unconditional love, and you’ll have your own set of age-appropriate expectations such as taking care of certain physical needs, (like tying shoes or using the bathroom), communicating pleasantly, and generally conducting themselves with appropriate self-sufficiency. Introducing a weekly allowance because they are members of the family is a good idea. They aren’t yet ready to work for the money and are still learning that money is something exchanged for things they may want. You can use proxy money like marbles which represents a comfortable amount which your child can then exchange with you for real money. They can use this money to buy things or gifts, but they’ll need to be taught how to count it. In this stage you all can have a lot of fun together!

Suggested amount: $3, one to spend, one to save, and one to give.

Suggested expectations: brushing teeth, cleaning up toys, keeping room neat, making bed, clearing dishes, picking out own clothes and getting dressed.

 

Helping around the house.Help & Cooperation: by the time kids are 7 they will want to help around the house. In the 7-9 years children naturally want to please their adults and relate their value within the family to being asked to do things and go places. They will need a fair, balanced cooperative system because they keep track of value. They count the number of times they get to spend time alone with you, and the special things Dad does with Son will be noticed by Daughter. In Assurance, you’ll need to create this system. This is a good time to teach them the difference between “no” and “not right now.” Help them learn to save for the things they want and give them ways to earn money for helping out. Increase allowance slightly along with raising expectations. In this stage they begin to help you, though there is a difference between the quality of kid work and adult work, but it will improve with time!

Suggested amount: $5. However, if agreed-upon expectations aren’t met, (by not doing them, cheating, something other than doing them with understandable kid-quality), they haven’t earned their whole allowance; in this way fines are introduced.

Suggested expectations: (in addition to the above), set the table, put away clean dishes, take out trash, recycling, and/or compost, fold laundry, help prepare food, help with yard work.

 

Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. They do not necessarily reflect the views of LPL Financial.