We don’t pay allowances for several reasons–one is that we want our children to learn to be part of a family; everyone contributes, and we don’t get paid for helping the family. For example, I don’t get paid for being home with them. We want our children to associate being paid with working. When they are old enough, they start working and begin earning their own money. This often starts with odd jobs for friends. Since they are still living at home, they are able to learn how to manage their money before being on their own.

Another reason we don’t pay allowances is that we can’t afford it most of the time, and we don’t want the children to see that. If you have one child, I’m sure you can afford to pay something every month, but we have multiple children, and to be able to pay them anything significant is just not doable several months out of the year. What we do instead is to involve them with budgeting decisions… for example, at the beginning of the month we budget for juice, special foods, etc… We allow them each to pick out one healthy beverage and one desert for the month, and usually a favorite meal as well. They have learned that if they make their own cake instead of buying a store bought one, that they can sometimes get 2 deserts for the month, or 2 favorite meals. Likewise homemade lemonade is less expensive than store bought juice, and so they can apply that difference to something else they like to eat or drink, or buy enough ingredients to have lemonade every day of the month. Similarly, if they pick a less expensive favorite meal, they learn that they might be able to afford 2, or an extra desert (Oreos are a favorite). If everyone will agree to pick a less expensive favorite meal, then we can use that savings to go out to eat, especially on Tuesdays when many places have a kid’s eat free. They save their pennnies and put it into a family fun jar, and we use that money to get specialty ice cream or slushies, to go out to eat, go camping, or whatever the entire family decides to do.

We use this phiilosophy with everything–do you really need the $15 jeans from Target, or will the $3 from Goodwill work?

They have learned that budgeting is a family affair–they get the practice of working with a real budget, of planning, saving etc… but as a family unit, not just as an individual. We see this as beneficial for when they have their own families, because it leads to a less selfish attitude of “this is my money, and I want this…” When dad gets a bonus, we all celebrate and benefit. This helps the kids to help dad (i.e. patience with longer hours, need for more rest because of longer hours etc…) because they know in the end, his extra work benefits everyone.

I will comment that they do receive birthday money and Christmas gift cards from friends and family members, and they can make that last all year, or they can get something that is really important to them…my littlest have spent the last year saving all of hers and she has finally reached over $100 and she is so excited. We try to save up and get them something that’s really important to them each Christmas an birthday. Last year, they all really wanted roller blades, so we splurged on a new pair for each. My oldest really wanted an MP3 player, and as a teen, we felt that was important, so we made sure that was in his stocking. Because these gifts are not received regularly, they are incredibly appreciative when they do receive them. This year, they’re all getting watches…that may seem boring to some, but my kids are thrilled! Also, each year we do purchase one or two family gifts that they can enjoy together… some years we have been able to do something big like a backyard pool. Other years, it’s been tighter, and we’ve bought a family game, movie, CD, or outside toy (we bought some sand to put in the bottom of an old tractor tire, and that was a huge hit…) Our children rarely feel deprived; we work hard at helping them to see and enjoy their blessings. Our oldest is a teenager, and our youngest is a first grader. They are very happy with their lives, and have learned the value of work, friends, and family. Those will benefit them in any economy… My oldest already has a plan for buying his own farm…it’s well thought out, and realistic. I think he will succeed.

Anyway, just .02 worth from a family that has a chosen a simpler life, and who is enjoying the benefits, even though our children don’t have the same spending freedom or purchase power as their friends. So for those who are also living frugally, there are ways of teaching your children the value of money, and giving them freedom in their purchasing power…just think creatively, and you will find the solution that works for your family.

Just one idea, I teach my kids piano. Because I don’t have to pay for lessons, I don’t mind spending money on new piano books, and I’m happy to reward them for their diligent practice by paying them if they log a certain number of minutes of practice time or if they pass of a song. The money I spend is minimal compared to what I would spend if I had to pay someone else and it is very motivating to my children.