Teaching Children Stewardship With Their Allowance

Written by Private Wealth Advisor David Lawless and Sr. Financial Planner Blake Mankin

In 2019, Blue Trust published “Should I Give My Children An Allowance?” by Private Wealth Advisor Shawn Jacques, who described teaching his children about stewardship through an allowance system.

As Shawn’s article explains, conversations with our children about finances, work, generosity, saving, and investing can take many forms. As adults, we know faithful stewardship and generosity come from a changed heart, not merely savvy investing or saving practices. Creating practical habits with our children around money can have long-term spiritual benefits for them.

An Allowance System that Teaches Stewardship

In our families, we found a categorized allowance system to be an effective teaching tool. Beginning at age five, our children received $3 weekly. If you begin this system with your children at a later age, you may adjust the amount higher.

Regardless of the amount, ask your child to divide the allowance equally into three categories:

Giving

• To develop godly habits, the first dollar (or 1/3) received goes into giving.
• While we know God loves a cheerful giver (2 Corinthians 9:7), and we should give freely, not forcibly (Deuteronomy 15:10), we start with giving regardless of young children’s excitement about it.
• Money from the giving category is taken to church each week for the offering box.

Savings

• The second dollar received goes into savings.
• Depending on their age and how much money you want to commit to this exercise, we recommend matching (i.e., 100%, 50%, etc.) to demonstrate how compound interest works.
• To use saved funds, children need to:
  1. Decide what they want to buy.
  2. Save up for that item.
  3. Ensure that they truly want to buy it once they have saved the total amount. (You can encourage them to wait an additional week to think about it.)
  4. Buy the item they saved for and celebrate

Spending

• The last dollar received can go into spending.
• They can use this money to buy whatever they want, such as candy or other small purchases.

Weekly Meetings

We recommend treating the child to a “Money Lunch” at their favorite restaurant to introduce them to the allowance system. After this, plan to set aside 10 minutes per week for each child’s “payday,” which you may open or close with prayer time.

The weekly meeting is an opportunity to review the chores they are responsible for and to celebrate with them about completing those tasks that week. To earn their weekly allowance, our children had to complete three “allowance chores” in the home, which are jobs that go above and beyond expected household chores. As the parent, you get to decide what jobs are appropriate.

When they receive their allowance money, it’s a good time to review what they are saving for and to reinforce two things:

1. A ‘call and response’ to the purpose of the allowance system:

• Who owns everything? God.
• How do we get money? Work.
• What do we do with it first? Give.
• Then what? Save.
• Then what? Spend.
• What does the bank pay us for our patience? Compound interest.

2. A biblical principle about the funds allocated to each bucket:

• Giving – Proverbs 3:9-10: “Honor the LORD with your wealth, and with the first fruits of all your produce; then your barns will be filled with plenty, and your vats will be bursting with wine.”
• Savings – Proverbs 21:20: “Dishonest money dwindles away, but whoever gathers money little by little makes it grow.”
• Spending – 1 Timothy 6:17: “Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.”

When first implementing this allowance system with our children, we read a weekly story about stewardship during the “payday” time.

Helpful Tips

• Use a visual for children to measure their progress. You might create a fundraising thermometer with dollar increments that they color in as they save up more or a printed picture of the item with increments they check off as they get closer.
• Don’t take away allowances because of behavioral issues. Children need to learn how to handle money wisely, regardless of how they conducted themselves that week. If they complete the work, they get the money.
• Use clearly labeled containers for the give, save, and spend categories. Here are some fun options:
  • Mason Jars but Fancy
  • Wooden Share Save Spend Bank
  • Save Share Spend Block Bank
• Keep meetings as enjoyable as possible. Celebrate wins and hard work, and your children will respond well and be excited about the meetings. “Rejoice with those who rejoice.”

Conclusion

As with every lesson we teach our children, understand that it won’t go perfectly. Your five-year-old (or 16-year-old) may not walk away completely transformed after one discussion. Plenty of your meetings will fall apart and turn into conversations about what they want to buy instead of the profound Bible study you hoped for. But in the same way you are using an allowance to teach your children that hard, consistent work pays off, please know that your hard, consistent work isn’t in vain either.

A thousand small conversations about stewardship, generosity, and wisdom about money will slowly move children towards understanding more of God’s heart and a deep, real relationship with the One who owns it all.

“Train up a child in the way he should go; even when he is old, he will not depart from it.” Proverbs 22:6

If you would like to speak to a Blue Trust advisor about your own financial stewardship journey, please reach out to us at info@bluetrust.com or by calling 1-800-987-2987.

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