@charles1014 Begin teaching financial literacy EARLY! Chores does not equal allowance because everyone contributes to a happy healthy home. Allowance comes from helping others, engaging in self-care/healthy habits, or taking initiative to plan something fun for the family. Allowance is then separated into categories: spend, save, and give. Give is donated annually at Christmas time to a charity of their choosing. Save all the way until their 16 and hopefully that will get them a car! Spend is self-explanatory. Spending money will also be used to teach them basic budgeting, such as purchasing extra snacks that we would not normally buy and that is just their own.
Some of this is beyond a 5 year olds ability but I think the earlier you start the better and you can just build on it as they age.
@dhebi I think teaching saving early on to really young kids needs to model the reward of the saving too. Just telling them “you’ll have enough for a car at 16” is not really something a 3-5 year old can understand. My plan is to start with short saving goals, like save X for one week, and you’ll get Y extra, but really let them make that decision and only try to guide them to the higher reward from saving.
Over time the saving periods/amounts will change and we’d introduce the idea of a really long term saving. When they’re old enough I would then tell them about their JISAs and pensions which we and family members contribute to, and show them how the value increases faster over time thanks to compounding.
@dhebi Agree, I like to model housework as something everyone does because it's collaborative, needs to get done, and is a care task for the while family, not a punishment or something that needs rewarding to do.
