Why Our 1 1/2 Year Old Gets Allowance

We give our 1 1/2 year old son allowance. It’s not a lot- $10 per month, plus the contents of our change jar. A lot of my friends think we’re nuts, until I explain our reasoning.

And yes, that is a recycled (clearance) applesauce jar

And yes, that is a recycled (clearance) applesauce jar

Instead of handing Little Man a crisp Hamilton every month, we have an allotment set up to take $5 from each paycheck and deposit it into LM’s very own savings account on the 1st of the month, where it earns a modest 0.15% interest. We also deposit the change in our change jar into this account whenever it starts to get full. We see this deposit as an investment in Little Man’s future. When he graduates high school and decides what to do with his life, he’ll have a nice little chunk of moolah set aside to help him out. When he gets a little bit older and starts to want things, we’ll divide his allowance and give him part of it to use each month, but we will still require him to put part of it into his savings account. My mother did this for me, and I feel like it helped me learn the value of money.

This decision is prompted by my husband and I’s upbringings. Hubby’s family didn’t talk about money, and his parents didn’t teach him about savings or interest. They lived paycheck to paycheck, so this wasn’t an oversight on their part- they just didn’t have money to save, so it never came up. He was expected to pay for his own car, his own phone, his own school supplies, etc. His idea of getting a paycheck was spending a paycheck. My mom, on the other hand, was always very clear about savings. She required me to put half of any money I got into my savings account, and we sat down once a month to talk about how my money was growing. When I got a good amount in my account- usually $500- she would buy a stock in my name, then we would discuss how it was doing. I learned a lot from her. Don’t get me wrong, I still made my fair share of money mistakes, but looking back I’m so glad I had those early lessons.

We want Little Man to have that experience. We want him to understand how money and time work together, and we want him to understand the concept of delayed gratification. When he gets older and wants an expensive toy, or a car, or his own cell phone, he’ll have to save up for those things. I know this won’t keep him from making money mistakes, but it should give him a strong foundation

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