Unconditional Money

July 11, 2011 at 5:30 am (Education & Learning)

When Elia and JJ were 5 and 3 we started giving them allowances.  I admit that age three was probably a little too young to start JJ on an allowance–he didn’t seem to grasp the concept that money was anything to be had–but he’s since grown into an understanding of money, saving, and buying stuff.

Our allowances are not tied to chores.  John and I expect the kids to help out around the house; their allowances are not based off of housework that they are expected to do anyway.

We give allowances for the sole purpose of teaching our kids how to manage and budget and, most importantly, make mistakes with, their own money.

JJ, now that he’s turning 5, will get $2.50 a week, and 6 1/2-year-old Elia gets $3. For us, this has been a perfect amount for the things they want to buy.  If they just can’t wait, and want to spend it right away, it’s enough to buy one or two really cheap things.  But it’s also enough that they need to save up for several weeks in order to get something that is nicer/ better quality/ will last longer.

When we shop and they ask me to buy something for them (as they inevitably do…repeatedly), I’ll tell them that’s not something I will buy them but they are certainly welcome to spend their own money on it.  JJ usually keeps his wallet in my purse, so when we’re out shopping it’s with us. Elia likes and remembers to bring her purse with her whenever we go out so she keeps her own money. When they see something they like, they either check to see how much money they have, decide if they want it badly enough to spend their own money, or add it to their wish list and keep thinking about it.

Right now, at their ages, what we work on the most is teaching them about…

  • The general concept of money–simply that it allows you to take stuff out of the store and keep it.
  • Values of each denomination–cents per dollar/ quarter, etc., and what to do if you don’t have the exact coins the price tag indicates
  • Saving–not savings in general, but saving up for specific items
  • Keeping track of your money–putting it away when you have it, adding it up, remembering how much is in there
  • Budgeting–how to divide up your money to be able to get different things that you want.

They’re all very concrete lessons right now. The more abstract ones like creating a general savings fund or giving/ donating are reserved for another day.

“Yeah but Mom, what do you DO with savings?” “Well, you just save it up.” “Yeah, but for what…what do you buy?” “Well, nothing now…or hopefully ever…it’s just savings.” “[blank stare]”

Elia has started saving a little bit on her own, and we’ll focus on it more with JJ soon, too.  Maybe after he can keep track of his crumpled wads of dollar bills that end up in random places around the house.  Or keep track what day of the week allowance is given.  Or what day of the week it is period.

As they get older, and we add the savings and giving expectations in there, we’ll increase the allowance accordingly. I can’t really say how much right now, but we’ll know what’s appropriate at the time. They’re just not ready for anything except what’s directly related to the immediate present; money = stuff = now.

Because the amount of their allowance is low enough while still being appropriate to what stuff costs, we don’t have a problem with buying too much. They either buy one cheap thing each week (and either lose it or break it, at which point it’s gone anyway), or one (relatively) nice thing every few weeks. Even at their young ages, Elia and JJ have learned great lessons from having an unconditional allowance each week. They have done their share of hasty spending, lots of wanting, and the realization of what it takes to get what they really want.

We were just in the store the other day and JJ saw a cool toy that he’d been wanting for a while. He checked his wallet and was reminded that he didn’t have as much as he thought because he bought candy last week. He was angry and exclaimed, “OH NO! I don’t have enough!” I said, “But that candy was good, though. That was a nice treat.” To which he replied, “Yeah…but it’s gone now.”  Yep.

I think having the freedom to make money mistakes and “learn the hard way” is so beneficial to young kids!  I’d much rather have my kids make their money mistakes now than in their adulthoods.

And money lessons are so much easier to teach when they’re not tied to chores; when that money is there every week, without fail, for them to decide what to do with. I don’t want to give our kids the opportunity to say, “I don’t feel like doing chores, so that’s OK if I don’t get my allowance this week.” Our perspective is: you do chores because it’s expected of all the family members to pitch in. And you get your allowance each week because it’s important for you to learn about money. They’re two separate issues.

Our kids’ unconditional allowances have given them the freedom to make mistakes (or have success!) with their money.   It’s helped them prioritize what they really want as well as experience the financial effects of poor buying decisions.


  1. Dawn Bauman said,

    Another great article. I understand you don’t want to tie money to chores. However, one extra tip: our kids can earn EXTRA money by doing EXTRA (above and beyond) tasks. For instance, say they are saving up for something and they want to earn a little money. My kids are old enough (12, 10 & 7) to do some real tasks. I have paid my oldest to SCRUB the bathroom top to bottom(and I mean floors on hands and knees.) I think it helps kids understand the value of a dollar if they have to put forth some good old manual labor to obtain that dollar.

  2. Aria Baker said,

    Another great post!

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