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Dear Care and Feeding,
I have a question about allowance. My kindergarten daughter’s school is having a book fair this week. My husband gives her spare change to put in her (dinosaur) piggy bank. She had enough money to buy herself a book and was so excited/proud. I’d like to encourage her to save up for things she’d like to buy rather than constantly asking us to buy her things. But on the other hand, doing a cash allowance sounds like a pain. Any advice? Am I crazy for thinking of giving a 5-year-old an allowance?
— Fill Her Pockets?
It’s really great that you’re thinking about these things for your daughter and want to encourage her to save her money. And no, I don’t think giving a 5-year-old an allowance is crazy! But I get that in our credit card world, having cash on hand for an allowance can be cumbersome, and getting into the routine of an allowance can be a pain. Here are some ideas.
Go to the bank and get a bunch of one-dollar bills and quarters and have it on hand so you have fewer trips to the bank. Another way to go about it is to focus on incentives instead of hard cash. So, if she does X chores each week for a month, she gets this toy she wants, or she gets to pick a special dinner, or she gets to go to the bookstore and pick out a book. That way she’s still getting the discipline of an allowance, without focusing on the money part of it (and you don’t have to go to the bank).
While we’re talking about allowances, a friend of mine had a brilliant idea for her kids. In order for them to get a more holistic idea of what to do with money, they split their allowance between three jars: spend, save, and donate. Whenever they get their allowance, they decide how much they want to put where. This has the added benefit of helping them learn to help others (plus it’s fun for them to find stuff on, say, a charity’s Amazon wish list to buy).