The Bayly Bank

As my kids get older, I've been fretting about how to do allowance. I've heard all sorts of variations on the topic; pay them to do chores, give them money that's not connected to any work to teach them money management, how much you should pay based on age, etc. I wanted to use allowance to teach my kids some basic principles of how the world works, including budgeting and savings, but I know most of them are too young at this point to grasp these concepts. I also didn't want to wait until they were old enough to understand the big concepts, and then throw it all at them with no foundation. I happened across a blog where the mom talks about this same issue, and what their family has discovered works for them, through trial and error. The blog is called 71 Toes and the Bayly Bank borrows heavily from their system, with a few changes that work better for our family such as it right now.

It starts out like this. Our kids have a chart where we keep track of some basic things that are required of them on a daily basis.

Maisie and Danyn are responsible for making sure their schoolwork and chores are completed daily, that they listen and follow directions, and that they maintain a good attitude. Rory also has listening and following directions and attitude, as well as finishing her dinner on time, and having a good nap. If one of these items isn't completed satisfactorily, they don't get an 'X' in that column for the day, and a percentage is taken from their weekly allowance.

Then on Sundays we settle up. We picked Sundays because everyone is usually home, and it's less chaotic. Now rather than just handing over their money, and hoping for the best, we've introduced the 10-20-70 Principle. Ten percent goes straight to tithing, twenty percent to savings, and seventy is theirs to do with as they wish.

I bought a little box to use as our "bank", and inside it we keep tithing envelopes and check registers. The kids put their ten percent into a tithing envelope, and the twenty percent for savings is added into an individual check register. Teag and I as the bankers have the responsibility of keeping track of how much money is actually being deposited into their savings, money that can be used for college, missions, maybe a car, who knows.

As Maisie gets older, she'll have more responsibility as far as calculating her own deposits and such.

Hopefully this will be a workable solution for our family, and something that's relatively easy to maintain. The kids are definitely excited about it right now, and I hope they will maintain that excitement even after the newness wears off. I'm sure we'll be changing/adding things as time goes by, but I feel like this is a good starting point at least. It's important to me that my kids have a real understanding of money, savings, credit, and budgeting before they leave the nest.