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How Much Allowance To Give A Primary / Secondary School Going Child

FINANCIAL TOOL 1 –  ‘FOUR JAR’ SYSTEM 

When my older daughter was in Primary school, she was able to buy a whole series of Winx Club magazines from her savings.

She still has it – her pride, and joy (from two years of persistent saving) – and refuses to let me ‘donate’ it to charity.

I’m proud of her achievement –  I can’t remember myself being that money savvy at her age….

I remembered it was by Primary Two my husband and I  had started her off on the “Four Jar System”.

This is a financial tool I had learnt and  adapted from a book written by Neale S. Godfrey “Money Doesn’t Grow On Trees – a Parent’s Guide to Raising Financially Responsible Children” .

It is a useful book that can be borrowed from our local library and the content is highly digestible ; it offers many practical tips to financially educate your child about the world of money.

WHAT ARE THE ‘FOUR JARS’?

The 4 ‘Jars’ ( categories ) are :

Spending, Savings ( medium term), Savings (long term), Giving.

What do they refer to ?

‘Spending’  is the money your child uses to buy food during recess .

‘Medium term savings’ refer to your child’s savings goals , achieved within a month or two.

‘Long term savings’ refer to expenses incurred during his or her course studies at University.

Last but not least, ‘giving’ refers to money put aside for birthday gifts for family and friends as well as money for religion offerings and donations to charity organisations.

I used money banks which could be locked but you can use bottles or transparent ‘piggy banks’ (particularly if you are starting them younger at Kindergarten at age 5.

DEFERRED GRATIFICATION

Assuming you use their *age as a guide to their weekly allowance , the table below shows  how Deferred Gratification can be taught and Medium Term savings goals can be achieved :

WEEKLY ALLOWANCE BREAKDOWN
TOTAL WEEKLY ALLOWANCE
SPENDING
(RECESS/SNACKS)
SAVINGS (MEDIUM TERM)
SAVINGS(LONG TERM)
GIVING
(PRESENTS)
 
 
 
 
 
Pr.1 ($7)
$5 ($1 spent daily)
$0.50
$1.00
$0.50
 
 
 
 
 
Pr.4
($10)
$7.50 ($1.50 spent daily)
$0.50
$1.00
$0.50
 
 
 
 
 
Pr.6
($12)
$10 ($2.00 spent daily)
$0.50
$1.00
$0.50
 Therefore, over the course of a month (assuming 4 weeks), the child at Primary 6 (last row) would have saved (in medium term savings) $2.00 ( $0.50 x 4)
Further assuming you pay your child $1 for a chore he has to do weekly (in my daughter’s case she had to bring our pet dog downstairs for its toileting every morning and night every week from Monday to Friday)that would be an additional $1 earned a week.
In total, over the course of one  month, she would have saved $6 and be able to buy her magazine.
Medium term savings goal achieved ! CONFIDENCE in money handling achieved ! (‘Yay’ for parents 🙂 )
DOES THE ‘FOUR JAR’  SYSTEM STILL WORK IN SECONDARY SCHOOL ?

Yes, it can , but it must be tweaked.

The first difference to note is the canteen food prices which can be threefold that in primary school.

The second is there are more breaks in a secondary school than in primary school – in my older child’s school there are two breaks now – a mid-morning and another lunch break.

So how does that affect the allowance amount?

In Secondary 1 and 2, we gave my daughter $30 weekly (that’s double the  *age guide for weekly allowance I mentioned earlier ) but that is just a GUIDE – it really depends on the canteen food prices of your child’s new school and how hearty your child’s appetite is 🙂

And it is no longer FOUR ‘  Jars’ ;  ‘categories’ for the money banks changed after she went to Secondary school ( do note too the amount alloted for each category)

The Spending , Long Term Savings and the Giving category remain unchanged. However, the Medium Term Savings category has been replaced by Personal Outings and Telecommunications.

These two categories feature very Prominently in a teenager’s  life – and my child knows that. By then, being financially confident she decided she had to have these two areas saved for as she knew we would not be handing out any money to her in these areas.

So she saved $5 every week for telecommunications so that she could afford the phone card which cost $18 per card from 7-Eleven  every month and the savings for the personal outings went into paying for her movies  whenever she went out with her friends which sometimes included lunch money.

FINANCIAL TOOL 2 – EXPENSES RECORDING

Another important financial tool to teach your child is to record all their daily expenses in a book.

You can use any note book. My children have been using the same notebook to record their daily expenses for the last three years.

My children MUST record their weekly expenses before they can receive their weekly allowance.

This is what a page of recorded expenses looks like :

And this is what I use it for :

End of every year, I add all the expenses recorded by the children and then form broad categories to establish an annual budget for the next year.

It is difficult to get your children to record their expenses judiciously. But like everything else, it takes time to cultivate a habit and one has  to start somewhere.It is most difficult at the beginning and you can understand why I would not give them their weekly allowance till they did their expenses recording.

However, after a month or so, once the ‘action’ became second nature to the children, the behaviour becomes ‘automatic’ and your child would have cultivated a good ‘habit’ 🙂 Don’t give up!

ADVANTAGES OF RECORDING EXPENSES

On top of giving the child a heightened self-awareness of their spending habits (and when to ‘cut back’ on ‘unnecessaries’ – like” I am spending too much money on sweets”) , expenses recording enables a parent to prepare a budget for the child the following year – it sets out how much money the child can spend on toiletries, clothing and school-related expenses.

In fact, if one keeps at this for three years and then averages the three years’ outgoing expenses in those large expense groups, the fiscal knowledge will come in very handy when it is time to ‘Hand Over’ the clothing or toiletries spending to your older teenager (Upper Secondary ).

This budget given to toiletries and clothing is kept in the bank and your teenager can only spend according to the amount of money he or she has in the bank.

This would be an apt time to introduce them to banking – atm cards, savings and current accounts, knowing how to write a cheque, credit and debit cards ,just to name a few.

 

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