Allowance for children and teens should not be tied to everything they are expected to do around the home or elsewhere. Some responsibilities are simply the privilege of being in the family and having parents or guardians meet their needs (washing dishes, taking out garbage, vacuuming, dusting, etc.). They should not be able to opt out of any duties you deem necessary for them to share that teach them how to progressively become responsible, disciplined, diligent, and fruitful members of the home and society at-large.
You can identify types of work that are optional that can provide minor amounts of pay that fit within the parent or guardians financial wherewithal, such as helping clean the pool, mowing grass, shoveling snow, etc. You could provide an extra $5 or $10 per month for thorough completion of such tasks. This will help them have extra money for hanging out with friends or engaging passions (drawing, painting, crafts, music, etc.).
Teach them the following principles and order of priority for managing allowances and other money received:
(1) God owns everything including any money the parents or they will ever have via gifts, work, allowances, bonuses, and any other income or asset. Therefore, they should look to His commands and principles to learn how to spend money that reaches their hands or bank accounts.
(2) Giving to help share the gospel of Jesus Christ with others who do not know Him and to helps those that do know Him become fruitful disciples should be the first thing they do each time they receive money. Preferably, they should be taught through your communication of bible passages and your personal example to give a tithe and free-will offering to the local Church you all attend and other worthwhile ministries / charities that please the heart of God, like rescue missions for the homeless, Christian orphanages, and Christ-center homes that care for widows without the resources to care for themselves. Explain the great benefits that God said tithers and givers would receive, such as give and it will be given unto you full measure, running over, Heaven’s windows opened over you pouring down overflowing blessings.
(3) Saving and investing to put money away for rainy days, later in life when you need living comfort the most, and simply because the LORD said it is wise to do it because we never know the moment or duration at which economic trouble will come upon the land. Each time they receive allowance or income from jobs, they should save at least ten percent in an emergency fund until they have at least three months of their gross allowance and income saved. After the emergency fund is built the ten percent should be aimed at investments such as no load low expense stock index mutual funds at brokerages that allow low dollar monthly investments. Such accounts may have to be kept in the parent’s or guardian’s name with the kids as beneficiaries until the kids are adults. Beyond this, you can teach them to put away an additional five percent for short-term goals, like buying a gamebox, giving birthday and holiday gifts to other people, and purchasing a used car after getting their driver’s license. In the meantime and in-between time, expose them to people and books that can explain how the U.S. banking and investment systems work. You should explain the wisdom and blessing that God said savers have: a wise man maintains stores of treasure but a foolish man spends everything he gets.
(4) Spending is the final step in the children’s good stewardship teaching process even though it will occur throughout their lives and often be a greater percentage of their income even while tithing, giving, saving, and investing. They should be told to stay away from using debt to obtain anything (no loans from Dad, Mom, or others) and to stick to using their own cash for purchases they make. If they cannot at the moment afford something, instruct them to set a future purchase goal and then save the entire amount of money before purchasing the item. You should explain that spending is a process that God established to allow us to receive many blessings. Yet, He tells us which spending pathway / decisions allow us to be blessed. Walking off this pathway (using consumer / non-mortgage loans) is not wise and brings curses into our lives that show up not long thereafter as poor credit histories, foreclosures, repossessions, and bankruptcy. This will put them in bondage, hamper them from pursuit of the LORD’s purpose for their lives, and give money to creditors He intended for them to put toward building a legacy of wealth for themselves and their future family.
The above good stewardship principles / priorities process requires that you help them establish a budget, maintain it, and over time help them take the major responsibility for updating it and following it. You should label three jars: one for giving (at least 11% of gross allowance and income), one for saving (at least 10%), and one for spending (at most 79%) and help them learn to put the correct portion of their allowance and income in each jar and spend it during the month or year for the particular associated budget items. When your income grows and the children mature, you will likely be able to give them more allowance and higher pay for optional duties.
When they reach age twelve you will want to increase their responsibility for purchasing basic needs (clothing, shoes, etc) while providing optimal guidance so they stay within reasonable, godly parameters in cost and style. Turning this responsibility over to them to a greater degree (by giving them a portion of what you budget to spend on them) will help them learn to make appropriate choices within money they receive and will grow them into adulthood by imparting responsibility and wisdom that will bless them throughout their lives.
Please pray for this ministry and email me with any questions. May the LORD bless you richly as you follow His plan!
Deuteronomy 6:4-9, Galatians 6:7, Ephesians 6:1-4, 1Timothy 3:4-5, Titus 1:6
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