Courtesy of Meg Wheeler
This as-told-to essay is based on a conversation with Meg Wheeler, founder of The Equitable Money Project. It has been edited for length and clarity.
I was raised by a single mom who was a teacher. We didn’t have a ton of money, but we always got by. As a kid, I noticed that my grandparents’ house was bigger than many others, and that they’d give me Christmas presents I’d be longing for. There was never a conversation, but over time, I realized that my grandparents were our financial safety net.
My mom was very responsible with her money, but she didn’t teach me much about finances. I learned by watching that “it will always work out somehow.” Yet, I didn’t have the knowledge to understand how — especially for people who didn’t have family backup, like we did.
As an adult, this led me to some financial mistakes, including taking on credit card debt. When I became a mom eight years ago, I knew I wanted to take a more proactive approach to teaching my son about money.
I wanted allowance to be a tool, not tied to chores
My husband and I talked a lot about how we’d teach our child about finances. We did loads of research and realized the world is split on whether parents should tie allowance to chores. There are good arguments on both sides.
We decided to give our son an allowance — $1 a week for each year of his age — that was not tied to chores.
For starters, we wanted to establish that as a member of the household, he was expected to contribute, without pay. In addition, if we tied allowance to chores, I’d be constantly tracking what he did and didn’t earn. I wanted allowance to be a tool to teach him about financial management. I could do that more efficiently if I weren’t also tracking his chores.
We’ve increased his responsibilities over time
We started off very simply with his allowance. He was 5 at the time and received $5 a week. He could spend $3 immediately, and needed to save $2.
I wanted the savings to be for a significant amount of time, but still short enough for a 5-year-old to grasp. We settled on one month. After a month, my son could spend what was in his savings jar.
Since then, our system has evolved. We switched from cash and mason jars to the Greenlight app, which allows me to give allowance digitally. We’ve also given my son more responsibility. If he doesn’t have his debit card on him, his dad and I will no longer give him money. Learning to keep his money accessible is an important skill.
I create additional opportunities for my son to earn money
In addition to my son’s allowance, I offer bigger paid projects. These are tied to chores because I want to teach him the satisfaction of earning money through hard work. Some recent examples include staining the deck and hauling trash up from the basement.
What’s interesting is that sometimes my son takes me up on these opportunities, but at other times, he doesn’t. I also have more control as a parent. If there’s a day that he’s really angling for screen time, I might increase the incentive to work by offering higher pay. He’s never caught on to that, yet.
I give occasional cash gifts to mimic windfalls
Before we started formal allowance, I used to bring my son to Michael’s, the craft store. I’d give him $10, and he’d spend ages deciding how to spend it. He’d pick up trinkets and put them down, doing math in his head to see what he could afford.
I still do that occasionally today. We interact with money differently when it’s a gift or a windfall. Learning how to manage those is a skill I want my son to have.
Finally, in addition to a college savings account, my husband and I put about $50 a month into an investment account for our son. He doesn’t know about that money yet, but we’ll tell him about it soon and work with him to decide how that money should be used when he’s 16 or 18. Hopefully by then, he’ll have the financial skills to make good decisions with it.
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