Teaching Kids about Money: Spend, Save, Donate

Teaching Kids Financial Literacy Skills

I want to teach my children to handle money responsibly so I polled the money-savvy moms that I know to get their take on allowance. I got lots of great advice, but I found Mom Friend Sheri’s advice to work for me: weekly allowance is based on their age (a dollar a year) and earning allowance is based on doing a couple daily age-appropriate tasks.

The next hurdle was determining the tasks that the kids bought into.

We settled on these chores:

Age 7: Feed the dog 2x a day and straighten up the TV room.

Age 9: Clear the table after dinner. Everyone brings up their own dishes, but clear the rest of the food and condiments. Put the leftovers in containers and place in the refrigerator. If the table is sticky or gross, wipe it down.

Age 11: Load the dishwasher after dinner. (I unload the dishwasher before she loads).

Earn an easy $5: gather up the trash throughout the house for dad or clean up the playroom. If the playroom is truly a disaster, the ante gets raised. Sometimes I try to hire them to weed the lawn, but I rarely get takers. Finally, I pay $5 for a perfect spelling test at school (long story on that one and don’t necessarily recommend this!)

In addition to the allowance income stream and the extra tasks optional income stream, my two older kids also try to get neighbors to hire them as mother’s helpers, organizational assistants and back up dog walkers. They also get money from their birthdays, Christmas and the tooth fairy. Most recently, the girls have been selling duct tape wallets and purses and sold lemonade in front of the house.

Now that the kids have income, they need to learn to put it into buckets: spend, save, and donate. The spending part is easy. The donate part is easy too. It’s the savings part that can be in conflict with the spending that trips up my kids and thus the savings results for each child is remarkably different. Our middle child is clearly the most money savvy. She is a great saver and a ruthless bill collector. Our oldest and youngest are more blasé with money and spent it more freely.

I wanted to incentive them to save, so I followed Capability:Mom‘s advice and match their savings account dollar for dollar. My middle one is all over this (of course!) and this new program has helped her siblings to stick more money into their savings accounts but since we don’t go to the bank very often and the statements via hard copy come quarterly, the excitement to save falls to the wayside.

I discovered PayOff.com through a business school friend. It’s a site that lets people set financial goals (pay off credit cards or mortgages!) using a model of online gaming to earn prizes. In short, it’s a fun, non-intimidating way to get save more! Thought it’s not intended for children, I thought this is actually perfect for my kids. The site lets them track their savings and watch it grow. The games make financial goals real and fun.

It’s never too early to teach kids how to handle money and I actually think that they need these skills before they go off to college and this is not a topic that is covered at school! How about you? How are you teaching your children about money? Please share your great ideas!

p.s. Here are also some great books that we read at home on money.



p.p.s. Thank  you to readers for these great suggestions!

The New Three Pigs: Creating Happy _ Please & Thank You!

Dad Cents: Teach Your Children Biblical Principles of Money by Shane Barkley

Thank you to Mama C and The Boys for this great piggy bank recommendation:

To view any book more closely at Amazon, please click on image of book.


Teach your kids good money habits with FamZoo's Virtual Family Bank.

By Mia Wenjen, PragmaticMom


  1. divasupermum antoinette

    great tips for earning pocket monies for chores

  2. m

    I thought you’d like this link to go with this article:

  3. Check out this fun book that teaches kids about money – the NEW 3 LITTLE PIGS, Creating Happy… Please & Thank You. Funny & inspiring, the 3 little pigs take you on a delightful journey saving money and learning good manners too. And oh no… they have a sudden surprise. A lonely rude wolf comes to town – but something good happens to all of them! Insightful & encouraging for all ages. Visit http://www.CharacterAvenue.com

    Posted by Gloria

    From my LinkedIn Group MOPS International

  4. Looks great. Thank you for the book recommendation!

  5. We recommend the book entitled Dad Cents. It’s got practical, biblical ideas for teaching kids about money in the different stages of childhood. Being wise with money is not simply a list of do’s and don’ts. A biblical and practical foundation that includes learning how to think about money is essential. In this book Shane Barkley gives the tools necessary to teach your children biblical principles about money. Visit http://www.biblicalparenting.org/productcart/pc/viewPrd.asp?idproduct=441&idcategory=0

    From my LinkedIn Group MOPS International

  6. Great topic. We just instituted allowance this year for our 7 1/2 year old: a portion just because ($2.70, this is 10 QR abroad) and a portion for chores (about $ 4 USD or 14 QR) Total is almost 1 dollar per year…

    For chores: he pulls his shades, turns off his lights, turns off the A/C (yes we can still use it this time of year), puts away his dirty clothes, puts his dishes in the dishwasher and wipes down the breakfast counter. I started a chore chart (and behavior chart). I told him we will track and see how he does and since it is posted he can see. I really wanted this to be positive as my son responds much better to the positive rewards. But said down the road if he is not doing chores we may have to dock for them.

    We have not gotten to the spend, save donate as much. He spends and donates easily (I will often times find his lunch money gone from his wallet and then a receipt in his school bag that he has donated to some cause, sweet! Now to work on the save!

    I am also in the process of teaching him little bits about being an entrepreneur and am writing a post with some of the entrepreneurs onine I a network with about how to teach this to our kids: so they have the choice.

    can’t wait to read the Three Little pigs book and try the Payoff.com

    • To Rajka,
      My kids also have trouble saving — one is very good at it but the other two prefer to spend. Matching the money that goes into their savings account did make a huge difference in their motivation. Sounds like your son in on a great path to financial responsibility! It’s wonderful that he’s so generous and supportive of others in need!

  7. Will try the matching! Thanks again for this tip!

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