I don’t tie my child’s allowance to chores. I wanted him to learn about financial management from an early age.
In a thought-provoking essay, Meg Wheeler, a certified public accountant and financial educator, shares her unique approach to teaching her 8-year-old son about money management. Unlike many parents who tie allowances to chores, Wheeler provides her son with a weekly allowance of $1 for each year of his age, emphasizing that this money is not contingent upon completing household tasks. This decision stems from her own childhood experiences, where financial lessons were learned more through observation than direct instruction. Growing up with a single mother who managed to provide for her family, Wheeler recognized the importance of financial literacy, especially for those without a safety net. Determined to break the cycle of financial misunderstanding, she aims to equip her son with the skills necessary to navigate the complexities of money.
Wheeler’s allowance system is designed as an educational tool rather than a reward for chores. By establishing that contributions to the household are expected without monetary compensation, she frees herself from the burden of tracking her son’s chores. Initially, her son received $5 weekly, with a portion allocated for immediate spending and the rest designated for savings. Over time, they transitioned to using the Greenlight app, which allows for digital allowance management and teaches her son about responsible money handling. Wheeler also introduces additional earning opportunities, like paid projects around the house, to instill the value of hard work. This multifaceted approach not only fosters a healthy understanding of money but also encourages her son to think critically about spending and saving.
In addition to structured allowances, Wheeler incorporates lessons on managing windfalls through occasional cash gifts, allowing her son to experience the thrill of making choices with unexpected funds. Furthermore, she and her husband contribute to a college savings account and an investment account for their son, which they plan to reveal to him as he matures. By doing so, they hope to prepare him for future financial decisions, ensuring he has the knowledge and confidence to make informed choices when the time comes. Wheeler’s innovative strategy highlights the importance of proactive financial education, showing that teaching kids about money can be both engaging and effective.
Meg Wheeler doesn’t tie her son’s allowance to chores.
Courtesy of Meg Wheeler
Meg Wheeler is a certified public accountant (CPA) and a financial educator.
She’s also a mom to an 8-year-old, who gets an allowance that isn’t tied to chores.
She says this lets her use the allowance as an educational tool.
This as-told-to essay is based on a conversation with
Meg Wheeler
, founder of
The Equitable Money Project
. It has been edited for length and clarity.
I was
raised by a single mom
who was a teacher. We didn’t have a ton of money, but we always got by. As a kid, I noticed that my grandparents’ house was bigger than many others, and that they’d give me Christmas presents I’d be longing for. There was never a conversation, but over time, I realized that my grandparents were our financial safety net.
My mom was very
responsible with her money
, but she didn’t teach me much about finances. I learned by watching that “it will always work out somehow.” Yet, I didn’t have the knowledge to understand
how
— especially for people who didn’t have family backup, like we did.
As an adult, this led me to some
financial mistakes
, including taking on credit card debt. When I became a mom eight years ago, I knew I wanted to take a more proactive approach to teaching my son about money.
I wanted allowance to be a tool, not tied to chores
My husband and I talked a lot about how we’d teach our child about finances. We did loads of research and realized the world is split on whether parents should tie allowance to chores. There are good arguments on both sides.
We decided to give our son an allowance — $1 a week for each year of his age — that was
not tied to chores
.
For starters, we wanted to establish that as a member of the household, he was expected to contribute, without pay. In addition, if we tied allowance to chores, I’d be constantly tracking what he did and didn’t earn. I wanted
allowance to be a tool
to teach him about financial management. I could do that more efficiently if I weren’t also tracking his chores.
We’ve increased his responsibilities over time
We started off very simply with his allowance. He was 5 at the time and received $5 a week. He could spend $3 immediately, and needed to save $2.
I wanted the savings to be for a significant amount of time, but still short enough for a 5-year-old to grasp. We settled on one month. After a month, my son could spend what was in his savings jar.
Since then, our system has evolved. We switched from cash and mason jars to the
Greenlight app
, which allows me to give allowance digitally. We’ve also given my son more responsibility. If he doesn’t have his debit card on him, his dad and I will no longer give him money. Learning to keep his money accessible is an important skill.
I create additional opportunities for my son to earn money
In addition to my son’s allowance, I offer bigger paid projects. These are tied to chores because I want to teach him the satisfaction of earning money through hard work. Some recent examples include staining the deck and hauling trash up from the basement.
What’s interesting is that sometimes my son takes me up on these opportunities, but at other times, he doesn’t. I also have more control as a parent. If there’s a day that he’s really angling for screen time, I might increase the incentive to work by offering higher pay. He’s never caught on to that, yet.
I give occasional cash gifts to mimic windfalls
Before we started formal allowance, I used to bring my son to Michael’s, the craft store. I’d give him $10, and he’d spend ages deciding how to spend it. He’d pick up trinkets and put them down, doing math in his head to see what he could afford.
I still do that occasionally today. We interact with money differently when it’s a gift or a windfall. Learning how to manage those is a skill I want my son to have.
Finally, in addition to a college savings account, my husband and I put about $50 a month into an investment account for our son. He doesn’t know about that money yet, but we’ll tell him about it soon and work with him to decide how that money should be used when he’s 16 or 18. Hopefully by then, he’ll have the financial skills to make good decisions with it.
Read the original article on
Business Insider
Eric
Eric is a seasoned journalist covering Business news.
