Kids and Allowance: Don’t Let Your Kids ‘Rob’ You

Don't let your kids 'rob' you

“Can I have that, pllllleeeeeasssse?” As a parent, how often have we heard that familiar phrase? If you don’t have kids, I’m sure you remember a time you berated your parents for a prized possession. At times we may give in, and other times we brace for the tantrum that is sure to follow the word, “No.”

Whether your child is 17 or 2, chances are they’ve asked you to buy them things. Giving in to all those wants can set you up for financial disaster, and teach your children the wrong message about money.

What’s a parent to do? Give them an allowance, of course!

Once the word allowance enters your mind there are several questions that follow:

  • Should the allowance be given freely OR tied to chores?
  • Should I only pay for extra chores?
  • How much money should I give my kid?
  • Should I let them spend it on what they want OR should I force them to save a portion of it?
  • Coins, bills, or a savings account?
  • How often should I give him/her allowance?

Allowance Approaches
There are various approaches to giving an allowance. Some parents believe every child should do basic chores without pay (making the bed, clearing the table after dinner, etc.) and offer extra chores for pay.

Other families give an allowance weekly, or monthly that is not tied to chores. It’s meant to be a tool to teach money management.

Still others will use a combination of both. Sticker charts, checklists, and to do lists are becoming a more popular option as well.

What approach should you use? There is no one right answer. It’s just what works for you and your child(ren). You may even need a trial period to see if your ideas work with your kids.

Basics of Allowances
The important thing here is to put actual money into your kid’s hands and to teach them how budgeting works. Many adults carry baggage about money, and most often it stems from lessons we learned as children. Most often these are unintentional messages that our parent’s sent about how they felt about money. By showing them how to mange money now you may very well help your kids avoid money mistakes that so many young people make.

Be Honest
Opening up to your kids about working, money, and your bad habits is key. For instance, when you go grocery shopping you take a list, if the kids tag along have them be responsible for a portion of the list. Perhaps cereal is on the list. Show your child the prices and give them a number you want to spend, and let them choose. Or maybe you need milk. Point out the difference in price between a half-gallon and a gallon, and why you choose the size you get.

How much should I give my child? And how frequently?
Many families give a small amount a week, and increase it as their child gets older. By the time your child is a teen, they should be able to handle their back to school spending, and a monthly budget.

Typically it is best to pay a young child weekly, or every other week, and an older child should get used to being paid on a monthly schedule.

Where should my child keep their money?
When they are very young you can encourage them to save their change in a piggy bank or change jar, and to give their coins as donations to church or to charity. Dollars can be kept in a wallet, or in the mom or dad’s wallet for safekeeping.

Around age 8 or so most kids are ready to set up a savings account. Choose a bank you can walk into, so your child gets the experience of handing over their money, and figuring out how a bank works. You can save money automatically for them, and take half of the cash they might receive on birthdays and at holidays into their savings account. Setting up an agreed upon percentage is a great way to make sure that they’re saving. For instance with my oldest son we had him save all his salary from his summer job while all his tips was spending money.

Many banks offer incentives for young children to sign up for savings accounts to get them started with $10 or $20.

What Our Family Does
We pay our kids bi-weekly an amount equal to their age. We used to take them shopping on payday, but quickly learned by doing so we were teaching them to spend every dime. The kids use wallets to hold their cash, and take them along when we go out, but now we track their money and give them cash when they need it. They end up saving more this way.

Our oldest also has a SpendSmart pre-paid debit card that we automatically put half his monthly allowance into. The other half goes directly to his savings account. This allows him to spend freely, we can track it via text message or email, and he can never overdraw his account.

We do not pay our kids based on chores. Chores are an expected part of life, and since mom and dad don’t get paid for chores neither do the kids. I will pay extra for chores that are outside the norm. A quarter for picking up a bucket of pinecones, $1/bag for the older kids to rack up leaves and put them in a bag, etc.

We also have a family change jar. The family change jar helped us pay for a swingset, pay for a (small) portion of our DisneyWorld trip, and more. Everyone is motivated since we all benefit from the savings.

The kids are responsible for a budget when shopping. For instance when the kids go back to school they get a set budget to spend on supplies and clothing.

No matter what you choose to do teaching your kids to be responsible and understand money is a valuable life skill, and they will quickly learn they can’t ‘rob’ your money since they have their own to spend.

What about your family, how do you deal with allowances? Do you use an allowance as a springboard for talking to kids about money?


Dinorama App: Teaching Kids Money Skills

The makers of Dinorama  asked me to try out their app since they knew my readers and I would love it, and I think they’re right! Dinorama is an app that’s designed to teach young kids money management and savvy saving skills. It’s not only a fun app, but it teaches tons of valuable skills. My favorite part though? NO advertising, and NO in-app purchases!  While we have our settings turned off (so the kids can’t make in-app purchases anyway) it’s a nice change to have an app that’s not encouraging spending more.
Dinorama Park

The app has quickly become a go-to favorite in our house. No, I did not play it myself for hours….okay, I did. Both because I love to test out stuff before I hand it over to the kids, and because it was so much fun!

What is  Dinorama?

Dinorama is an iPad app that helps you design and care for your own dinosaur park. The idea and execution are simple, but it offers hours of playtime and learning fun.  While there are loads of features I’ll share the reason it’s a great fit for the blog is because it teaches kids about saving and making smart investments.

Here’s how it works.
You have your own Dinosaur Park. To start you’re walked through how to set up your park, care for your animals, and how you earn money and stickers. Money is the currency you use to purchase new attractions or pet dinos for your park, as well as feed your animals and care for their habitats. You can also earn money through attractions like a photo booth, café, and even upgrades to your dinosaur’s habitats. Stickers are collected to open new ‘shelves’ in the store where you can purchase habitat upgrades, attractions like a balloon stand, and hire workers like a tour guide for your park.

Customize your park.

Customizable park features include picking the names and colors of your dinosaurs, choosing upgrades to their habitats (which can also earn you additional money from visitors), and choosing where and what attractions you’d like in your park.

Take care of your dinos and park.

Dinorama Fixing Habitat
Caretaking  is a big part of the app as well. You have to maintain the habitats by scooping poo, cutting down webs, and fixing leaks. You also have to feed your dinos on a regular basis. A nice touch was that healthy foods give the animals energy while ‘treats’ get the dinosaurs to do a trick.

While kids will learn a lot about caretaking the main goal of Dinorama is to help kids learn to save more and spend wisely. Learning about dinosaurs is just the icing on the cake!

Learn to save and spend wisely.
To teach kids to weigh the savings they get from spending more the app uses some clever devices. For instance if you have a popcorn stand you can refill the popcorn stand with 15, 30, or 65 bags. The more you buy, the larger your profit. If you leave the popcorn stand unstocked, potential visitors won’t visit which means you won’t  receive  their admission. Thus the key to running a successful and profitable park then is to save up and purchase larger refills for bigger profits.

Dinorama restock attractions

Additionally there is a piggy bank that you can use to increase your savings. If you save more, you get more interest. It takes longer, but kids will soon learn it’s better to save for the long haul.

Dinorama Savings Bank

Money Skills Dinorama Teaches

Savings is rewarded.  The more you save and the longer you wait for your returns, the more you earn. This teaches kids about compound interest and long-term investing.

Profit margins are higher the more you spend. Whether it’s buying in bulk or making larger investments, kids are learning that buying in bulk can get you larger profits.

Managing multiple ‘assets’ requires attention to detail. Not only do kids have to keep their dinosaurs fed and happy, but they also have to stock stands at their park to ensure guests visit.

Know when to spend and when to save. The app quickly teaches you that overspending will lead to unhappy visitors and dinosaurs. Kids will learn that they have to maintain everything without overspending.

Save for a rainy day. You literally have to save for a rainy day in this app! When it rains, less visitors show up to your park, so you have to save up for those times to ensure you still have funds for stocking your park, and feeding your animals.

Maintenance is key. Without maintenance of the dino habitats and the park’s attractions you won’t earn as much.

Dinorama Reviews:

Dinorama Park 2

My Review:
This is a must-have app for teaching kids money skills in the guise of an app that’s fun to play! Any young child that loves app play and/or dinosaurs will love this app. Since the app is new I offered the makers my opinion and will share with you as well.  I’d love to see is a ‘login’ screen so multiple kids (ahem, and adults) can have their own parks. As it is now the app only allows you to create one park which cold making sharing tough. While most of the app is picture-based and easy enough for a non-reader to understand, there are some text portions. The text is shown, not read outloud which could make it tougher for non-readers. I helped my first grader read through the instructions anyway, but he had to ask me to read some of the tougher words the tour guide shared as well. Overall though those slight issues are easily improved in the later versions, and the app itself gets two big thumbs up from me.

Kids’ Review:

Aidan says, “I love that I can name my dinosaurs and pick their colors! That’s fun.” He also shared, “I was sad the first time my dinosaur ran away (from not caring for it), but then I learned how to care for them, and now they’re all happy. See, this guy is eating his broccoli trees right now.”

Audrey says, “I like everything about this! I love to save in the piggy bank, but I really like running the park and getting to pick everything that goes here.”

The bottom line:

All the  activities  in the app translate into some great conversations with kids about saving, spending, investing, and other money skills. It will open up discussions about spending smarter, saving for a rainy day, and more. If you have an iPad this app is a must-have.

Right now the app is on sale for only $1.99, that’s 60% off the regular price! You can learn more and download the Dinorama app on iTunes.


Disclosure: Dinorama gifted me the app to try and compensated me for my time, but all opinions (and fun had!) are my own.