If you don’t tell your money where you want it to go, it will be gone before you know it. (Click to tweet this.)

Most parents know they need to teach their kids about money. The problem is, they don’t know how.

And the parenting experts, of course, don’t make this any easier on us. Some of them claim you should never pay your kids for doing chores. Instead, offer allowances to help teach them how to handle money. Paying kids for their chores, according to these experts, breeds entitlement. Kids will only do chores if they are paid. (And, truth be told, this is certainly something to think about if you decide to pay your children for chores.)

Other parenting experts, in contrast, claim you should never give allowances. That you should instead pay kids commission. The theory behind this one is that the world works this way. When we work, we get paid. When we don’t work, we don’t get paid. Paying kids for their chores, thus, helps them learn how the world works.

Both of these theories have merit (and please know I simplified them for brevity’s sake). My husband and I prayed long and hard before we decided to incorporate some of both theories into our strategy. So far, our method is working well, and you are welcome to steal my idea if you’d like to give it a try.

We have some chores that are mandatory, “because you’re part of the family,” chores. Helping with dishes after dinner is one of these chores. Each person in the family (even our 18 month old) brings his or her plate to the dishwasher and helps with dishes.

Another “because you’re part of the family” chore is picking up toys and dirty laundry. Our kids are not paid for these tasks. Instead, they do them because that’s what a family does. A family works together. A family helps each other.

Other chores, though, are paid. Our four-year-old has daily chores he can choose to do or choose not to do. If he does his chore, he gets 5 cents per chore. If he doesn’t, he doesn’t get paid for that day.

We’ve also been working with him on having a good attitude, so we included this in his chore chart as well.

I’ve included it below, but let me explain how it works. For each day, he has the option of earning 15 cents: 5 cents for getting ready for the day with a good attitude (the bed), 5 cents for doing his daily chore with a good attitude, and 5 cents for getting ready for bed with a good attitude (the bathtub).

The chores are as follows:

Monday-Laundry
Tuesday-Clean Bathroom Sinks
Wednesday-Vacuum
Thursday-Gather  Trash
Friday-Clean Trash Out of Car

He puts a sticker on each task he completes. At the end of the week, we have “payday.” We count the money he has earned and then pay him for his efforts.

Then, we help him divide his money into a three-part bank. He puts some into savings, some into spending, and some into giving. (At this point, we aren’t worrying about percentages, but once he’s a little older, we’ll start working with him on this too.)

There you have it. This system works for our family. Our son is learning about money, as well as learning how to do some important tasks (that I know his future wife will appreciate him knowing how to do!)

Let’s talk: How do you teach your kids about money? 

If you want to teach your kids about money, but don’t feel like you even know how to handle money yourself, I would love to help with this. I have a free ebook called “Financial Freedom on a Fixed Income.” It’s a free gift for all newsletter subscribers, and I would love to share it with you! Just sign up on the right hand side of this blog, and I’ll send the book to you ASAP! 

I’m linking up this week to the following blogs. Come say hello!
www.thebettermom.com
www.thekoalabearwriter.com
www.themodestmomblog.com
www.womenlivingwell.org
www.raisingmightyarrows.net