The value of an allowance

My husband, Geoff, and I decided to give Adam $2 a week so he could save up to buy new games.

I hate video games. Not playing them — I enjoy a quick game of Tetris as much as anyone — but the never-ending demands of my five-year-old, Adam, for new (and more challenging!) video games. (Before I get inundated with comments about how video games are evil, I should note that I limit his screen time to one hour a day.)

As I'm sure you are aware, the cost of these games really adds up! So I told him I'd add the ones he wants to his next holiday or birthday gift list. He wasn't having any of it. He wanted a new game now. I stuck to my guns. It was war.

I needed a new plan.

That's where the allowance comes in. My husband, Geoff, and I decided to give Adam $2 a week so he could save up to buy new games (age-appropriate, of course). The nagging has lessened considerably — probably because he now feels he has some control over the situation.

But that's just half the story. The other, more exciting, part is that Adam is learning about money, what it can buy and how to save it.

Every week he counts up his loonies and toonies (often several times, because he thinks he'll get a higher number if he counts them in a different order) and we figure out how many more weeks he needs to save to get that coveted game.

Well, this week he finally saved the $18 he needed to download Banjo-Tooie, a fairy tale adventure game he's had his eye on. It was a happy, happy day. And I think he is even more pleased with the game because he bought it himself.

How old were your kids when you started giving them an allowance? Do you think five is too young?

About the Author

Tamar Satov

Managing Editor, CPA magazine
Tamar is a journalist specializing in business, parenting and personal finance. She blogs regularly in this space with advice and anecdotes on her efforts to raise a money-smart kid.