5 Steps to Teach Kids that Allowance is Serious Business

I have been a parent for nearly a decade and there’s nothing that can make me cringe like the constant barrage of requests to buy something new.  It’s a challenge for even the most disciplined parent to keep saying, ‘sorry, but NO.’ Eventually, you give in and you hear yourself say, ‘FINE, yes, get it.” Is this parent-child dynamic inescapable?

I’m an optimist and say, ‘yes!’ Let’s take a fresh approach and teach our kids the fundamentals of money management starting with earning, saving, sharing and shopping wisely.

Here is a 5 Step-by-Step guide to help bring ‘Can I have . . . ?“ into ‘How can I earn . . . ?“ and shape our kids critical thinking and healthy financial habits.

Step 1: What’s the goal?

We want our kids to know that anything is within their reach but you need a game plan to get there.  Whether it’s completing their daily chores to attain their financial goal or practicing the piano every day to get selected for the school’s recital, a sense of accomplishment and pride in work is a critical life skill. Setting worthy, achievable goals gets kids excited about heading down the path towards future success.

Step 2: Focus on money management skills.

Kids can earn money from chores or age appropriate jobs, like pet sitting, but if you can’t manage your earnings you are out of business. One great way to learn how to manage money when you are younger is to distribute or allocate funds into three separate accounts  -- Save, Share and Shop.  Each account has its own purpose and is available when you need it. This step sets up a strong foundation for healthy financial habits to build on.

Step 3: When in doubt, ask, “Is it a need or a want?”

Walking into a store and seeing everything new and shinny is overwhelming for kids (and grown-ups!) and can throw off the best game plan.  Talk to your kids about needs (e.g., food and water) and wants (e.g., toys and candy) when you are running errands, in the grocery store or driving in the car.  Be assured, it’s not too early to start this conversation and it will help our kids mature a critical life skill that will help them tackle increasingly more substantial choices later in life.

Step 4: Ask, “How did it make you feel?”  

A little reflection goes a long way. By achieving set goals and being financially smart, kids gain confidence and satisfaction with a job well done.  What parent doesn’t appreciate hard work and great attitude? Let’s not forget among the hustle of bustle of life to acknowledge a job well done and grow self-esteem. 

Step 5: Go for it! 

Allowance paves the way for possibilities and opportunities and puts a twinkle in a child’s eye. You only need to see the smile of a successful, summer lemonade “sales-kid” to understand the impact of this one. Let’s encourage our kids to adopt wise money skills and make allowance serious kid business.  

iPiggiBank: What we are? What we aren’t? And why.

As the CEO of iPiggiBank, one question I am often asked is, “Do kids get real money from iPiggiBank for chores?” The answer is NO. And, here’s why.

iPiggiBank is for real families that want an incredibly helpful way to manage and approve real chores in their home, teach responsibility and introduce real money management skills. Parents are the bank so kids earnVERY REAL money from a family’s budget.

It’s your family. It’s your money. iPiggiBank is here to help.

Other chore and allowance sites use debit cards, IOUs, stickers, points, pre-paid cards (which may or may not be cashed in). When a child is ready to use their allowance, iPiggiBank notifies a parent(s) and gives them options with links to — their family’s bank homepage to move money into their child’s savings account; retailer sites to shop from their child’s wish list; and pre-selected charity pages to donate to directly. VERY REAL money comes from parents for jobs well done.

iPiggiBank is a tool for parents to help encourage their kids in a FUN way to learn responsibility, earn money, manage it wisely(!) and elevate conversations at home about healthy financial habits. We take it so seriously that we created an offline education program called, Money Management for Kids (stay tuned for upcoming dates and locations).

Still open to questions though . . .