Save. Spend. Splurge.

Why I am teaching my kids about money by not giving them any to begin with

I obviously see the huge benefits in teaching your children about money early on, no matter how young they are, but for me, being a parent means being a role model for them in the sense that what I do, I expect to see emulated in them.

(This may or may not be a good thing considering my track record .. HAH! Good thing my partner is far smarter about this slightly foreign concept you call “frugality” than I am.)


However, I am adamant I will not be doing these two things:


A lot of financial advisors and parents will tell you that a child should get an allowance something akin to a dollar for how old they are.

7 years old? $7 a week (or a month? I don’t even know).

While I see the good side in giving them their own money to budget and handle, I am not as thrilled with the idea of giving them money for nothing but how old they are.

I mean how realistic is this?

At 65 years old, will I get $65/a week just for being old?


So why the heck would I teach my kids this as an early money rule?

Even if they understand later on that it’s an allowance and not something that is indicative of reality, I am not interested in starting them off feeling like they are entitled to an amount each week or each month.

It’d be like teaching them that when they go to retire SOMEONE will pay for them and take care of them, like let’s say the government?

Well I don’t have to tell you how realistic I think THAT is.

They’re going to learn that to get money, they have to work for it.. which brings me to my next point.


A lot of parents will say:

I agree with not giving them an allowance!

I will just pay them for when they do their chores.

Nope. Not happening in my household either.

For me, children have 2 jobs in their lives up until the age of 18 that I expect them to do without getting any money:

  1. Contribute as a member of the family by doing chores for the family
  2. Go to school and get good grades


Since my children will be part of the family, they will do things for the family as a contributing family member.

My reasoning for this is that as a parent, and I am also a contributing family member, but I am not a slave.

I’ve seen far too many parents and grandparents act like their kids and grandkids are the masters in the house and they’re just there to give in to their childish whims.

From my perspective, not only do I bring home the money, pay for shelter, food, clothing, utilities and things they want/need, it makes no sense at all to me that I should have to also pay my children to act like contributing members to the household and part of the family.

It’ll just make them start asking you money for every mundane little thing like cleaning up their room, going to bed on time, or helping clear the table — all things they should be doing anyway and for free because I’m doing those things, and supporting and taking care of them.

It soon spirals out of control as I have seen in some households.


I know a father who pays his daughter to hug and kiss him. She learned early on to negotiate and ask for $20 bills for each kiss she gave him.

He thinks it’s cute and funny, I think it’s appalling for more reasons than one *cough* golddigger-in-the-making *cough*.


Some parents will say:

Okay I concede to that.

Chores aren’t paid, but if they work really hard and get good grades in school, can’t that be seen as my giving them a bonus for doing so well at their “job”?

I admit there’s a little something there with paying children to obtain straight As in school, but again, I will not be doing this with my kids.

Their job is to work hard and get good grades in school, and in return, they’ll be able to not only learn and better themselves, but to also find good jobs (presumably) afterwards.

Essentially what I am saying is that doing well at their job (getting good grades at school) is something they should be doing.. FOR THEMSELVES.

They shouldn’t be getting good grades for ME, even as a parent.

Strictly speaking I shouldn’t care at all if they had a good job or not and have to be stuck working minimum wage and struggling for the rest of their lives because it’s really something they should understand they need to be doing for themselves so that they aren’t stuck working nasty jobs for very little pay.

(Of course I would care enough to parent them onto the right path, but I hope you see my logic in what I am saying.)


Why would I pay them for something that basically doesn’t benefit me, but benefits them?

Can I really pay my child to develop a work ethic?

What if I stop paying them to get good grades — will they revert back and become lazy bums if there’s no money coming their way and therefore no motivation?

Will I just have to keep paying them forever to keep coaxing them and motivating them?

What about if they get a job — will I still have continue to have to pay them to make them work hard to climb a corporate ladder?

That all sounds ridiculous.

Sounds like a waste of money to me if they don’t want to work hard in school to better themselves.


I am not going to be enslaved by my own children as some A+ paying machine. I will do my best to help them, tutor them and teach them as much as possible above and beyond what they’re seeing in school as any good parent should, but money will not be a factor in this.

If they aren’t already motivated by my talk of understanding what hard work means at the end of them (good paying job for instance) and then choosing to be lazy instead of putting in the effort to do well in school, then I am not going to supplement and enforce this mercenary attitude by encouraging them with money.

No one has given me money from my family to be better at my job, and I don’t think it’s reasonable to expect that your family should give you money to encourage you to keep working and to be motivated to do well at anything you consider to be your job (e.g. school).

Aside from what I consider was an excellent salary out of school ($65,000) which I negotiated hard for, all I got was a pitiful bonus from the company (if that) at the end of the year.

…..but that pitiful bonus wasn’t really what I was working for — who works mind-numbing 80 hour work weeks just for $1000 at the end of the year? — I was working for myself because I knew it would bring more money as a salary if I could be promoted as soon as possible and move to a higher and higher position.

This is what I am expecting for my children as well, and if they don’t turn out to see the rationality in what I am proposing as the Reality & Logic of Life, at the very least I won’t be wasting my money trying to teach them something they don’t really care or want to understand.

Here’s what I will be doing instead:

Note: Just in case you are wondering, I did not receive an allowance as a child, nor did I get paid for getting good grades in school.

I knew I wanted/needed money for candy, so I started working at 7 on a paper route.

I never really stopped working (sometimes taking on 3 jobs to pay for college) until I became a freelancer a few years ago and wanted a better work-life balance.


Obviously I will be teaching them how to create an run budget. I’m a freak for that stuff because it’s cool.

For when they’re little, it will be simple things like showing them how much living costs, what we spend on groceries, and little lessons on the fact that everything costs money.

When you walk into a store, and you pay someone either with cash or a card, it is money that comes out of your pocket, not some magic card that you flash and get stuff for free with.


Then as they get older and get part-time jobs (and believe me, they will be working), they are going on the tracking expenses bandwagon as well so that they can see where the money is being spent so that they can’t complain to ANYONE that they’re out of cash before their next payday.

(I do not want to hear that kind of nonsense.)

I will also (on their salary) show them what living on their own would typically cost, with rent, utilities and so on, so that they understand that every penny that they make is not 100% disposable income, and to show them that even working minimum wage, they couldn’t afford the current lifestyle that their father and I are providing for them — that it takes much more money.

They will understand that there are obligations to pay for shelter, food and utilities first before they have any fun money, and if they want MORE fun money to spend in addition to living the lifestyle they are accustomed to, they will need to make more money, which means working more hours or getting a better paying job… all of which can be had by having good grades in school.

(See where all this is going?)


When they’re little, it will be letting them pay for small things like buying fruit at a fruit stall, helping them count out the money, and then receive back the change and understand how much they spent.

Showing kids money, actual coins and cash will be handy for children to understand that you have a finite amount ($10), and when you spend it, it’s gone, so you have to understand where the money is going.



Had someone taught me this when I started my first job, I would have been more inclined to save, I think.

Showing me numbers and proof convinces me faster than just talking.

If I can see that I set aside $200 a week of my paycheque and it grows into X amount after 10 years, it excites me more than just telling me vaguely: You should save your money.

..which brings me to my next point:


In my books, early independence is a virtue, especially financially speaking.

I was pretty independent at a young age.. by 7 I was doing my own laundry, walking myself home from school and making my own lunch (this was before everyone was freaking out about child kidnappers), as well as basically taking care of myself the best way I could (making my own dinners sometimes which were cans of soup or sandwiches because my parents were never around to do it for me).

While I do not really want my children to live off cans of soup or sandwiches (I’ll be having them help me make dinner instead, thankyouverymuch), I want them to start saving for their own education early on so that the message of: You are on your own for this education thing, comes through loud and clear.

This is a perfect lesson to couple up with RESP savings, which incidentally, Baby Bun is already saving for himself before turning the age of 1.

I’ll tell them (and show them) that if they save $2500 a year in an RESP (registered educational savings plan) for themselves, they’ll get $500 from the Canadian government.

Free money should motivate anyone, and when they’re old enough to manage their money from the government (or at least, say where it goes) there’ll be no crying or whining when they realize they have to take out student loans to cover their education if they decided to blow it on a car instead (they may even think twice about this, thank goodness).

If they DO decide to save, it means they’re thinking about their future education and learning about compounding interest to begin with.

I really wish someone had told me when I got my first job at 7 that I could save money for myself and earn free money. We didn’t know jack squat about RESP or anything to that effect.

Had I known, I would have probably tried my hardest to save $2500 a year to get that $500.

(This goes for any cash gifts or anything they receive from anyone. They can even ask for money as their birthday gift instead of stuff, and then decide what they want to buy or do with it.)


I will take them in to get their first bank account, open their first balance and teach them what questions to ask the bank especially in regards to fees, numbers of transactions and grown-up stuff I had to learn on my own.

As for a credit card, getting a credit score early on especially as a working teenager is important. I got my first credit card at 16 and never paid a penny in interest because I was given only ONE money lesson my entire life by my father, who said: When you buy something on the card, pay for it immediately with your bank account.

I listened quite faithfully and never made a mistake there.

Had he had any more pearls of wisdom like that as I grew up I’m pretty sure I wouldn’t have had to struggle quite so hard to learn how to get out of $60,000 of student debt in the beginning, and may have done it faster than in 18 months.


Now I half joked about being a bad role model, but honestly I do believe that you should save your money and spend it on what YOU believe is important to you in life.

See, I will NOT be setting an example to be cheap or “frugal” to the point where I am making them count toilet paper squares, but I will be showing them what priorities are in life, and then as they get older they can decide which priorities make sense to them and go from there.

Taking ownership of what you consider to be your decisions is one of the best lessons I ever received as a kid.


I don’t spend waste/money on furniture, overpriced rent, utilities I don’t need, debt, cable TV, smart phones, fancy decorations, many commercial toiletries or cleaning supplies, but I do spend good money on eating good food, clothing, electronics, and other things in life that I find important instead.

Basically, the way I live my life is that you can spend your money on WHATEVER you want as long as your priorities are in order.

Food first, of course.

(I still don’t get why people own an expensive smartphone with fancy data plans but eat cheap, almost rotten food to afford it and ruin their bodies, but that’s another discussion for another day.)

I want them to understand that they should enjoy their money in the NOW but also think about their retirement in the FUTURE.

It’s a fine balance between the two and the sooner that they learn about delayed and instant gratification, the better.

I and my partner are big fans of the “teach them to fish so they’ll fish for themselves” because we won’t be around forever to baby them, nor do we want to.



  • Tania

    I didn’t get an allowance but at certain ages a budget for items they were providing. For example for clothes, I had a monthly budget in high school, which wasn’t much. I didn’t get the money handed over too. I could select something and then ask my dad to come with me to buy it, within my budget. At a younger age my main budget was for books and candy (I got one book or 4 comics and one candy from the ice cream shop, we’d go after school/work each Friday before we ate out at this Japanese place). Since I read voraciously, my mother took me to the library each Wednesday and I could borrow as much as I wanted. I worked since I was 15 and my wages covered stuff like prom but mom/dad paid for clothes, tennis stuff and food/going out with friends money (minimal – we mainly went to the beach or movies).

  • Stephanie

    If it gives you encouragement, my parents did the exact same thing and my brother and I both turned out just fine when it comes to money. They clearly told us what our responsibilities are: get good grades and help out around the house once in a while. I got good grades and helped out a little.

    Your post also reminded me of an experiment described in Freaknomics. A couple economists tried paying high school students getting bad grades in a Chicago ghetto to start getting good grades. They found that some students started studying and continued studying even after the experiment ended and that the extra money had no effect on other students.

    But values are instilled at a younger age than high school, and usually not through school. I’m sure that with two parents who budget their money carefully, that Baby Bun and his siblings will be great money managers as long as you and your partner don’t hide the details from them.

    • save. spend. splurge.

      I think it depends a lot on the personality of the student as well. I got nothing and I had a drive / competitive spirit to get the best grades.

      I won’t be hiding any details from Baby Bun. He’ll know how to budget for sure, and how WE budget.

  • Genevieve

    My parents didn’t give my twin sister and I money for grades or chores … and we did a spectacular job on both.

    My husband, on the other hand, figured out pretty quickly that mowing the lawn was worth more than $1, so he didn’t really do the chores his parents hoped for. And they weren’t willing to pay the going rate either!

    When we were 12 and wanted all the brand name clothes, my mom instituted a clothes allowance. I believe it was $150 for each of us twice a year. This is when we really learned how to use money well — it didn’t make sense to buy $80 Gap jeans if we only had $150 to spend. Then she didn’t have to fight with us about what we were going to buy. We used to hate going to thrift stores, but when it was “our money” we loved getting great deals. We were about the right age to really get the money lesson as well.

    I don’t know what it will be with your kid, but I’m sure there will be many opportunities to learn lessons like that! I think it worked in part for us because we wanted and needed the clothes — not a luxury like buying a video games or movie tickets.

  • Lisa E. @ Lisa Vs. The Loans

    I actually really like this idea! I don’t have kids right now, but if/when I do, I don’t want them to ever feel entitled to money from the start. You work for it, period.

  • Will (from First Quarter Finance)

    Encourage them to open a Roth IRA ASAP! I opened mine young and was one of the best decisions I’ve ever made! Just have to prove an income (not as hard as it sounds. I think a slip of paper with numbers on it will work.)

  • Tim Stobbs

    Mmm, I sort of agree with some of your points, but I dont’ agree with others. For example, yes, I give my kids allowance, but that is tied to them doing specific chores. But not all of their chores…for example, I expect them to put stuff away period, but I will pay them if they dust their rooms and various other tasks in a week. If they fail to do any of the ‘extra’ chores, they get nothing. That only happened like once per kid and then they clued in. I want them to learn that doing a good job is required in life to get paid.

    I like the idea of giving them some of their own money as they learn the emotional issues with money. For example, yes they could can buy this toy car now or save up for that Lego set they REALLY want. They did so well once that they had family helping them save up for buying a $100 LEGO set, which they split the cost on and used a combintation of savings and gifts to buy. This also helps them control their wants and learn they can’t have it all. I am also spared being asked 10000 times can I have THAT toy.

    Also counting their money every week is great support on math skills, so I agree fully with letting them handle some money just to understand how things work.

    I also save government cash for the RESP account. They have over $50K between them and they are only 6 and 9. 🙂

    Anyways, good luck on what ever method you use. There are tradeoffs to all the options.


    • save. spend. splurge.

      I can imagine them repeating to you over and over again for that toy. Personally, I don’t want to pay them for any chores at all to set a precedent for anything. Chores are family work. If they want to earn money, they’ll have to go out, mow lawns, shovel snow.. do all the things outside the family to earn money.

      Do you contribute extra to the RESP? I don’t plan on doing this. I’m putting only government / provincial money in there.

  • Potato

    “At 65 years old, will I get $65/a week just for being old?”

    *cough* OAS *cough*

    I did get an allowance and bonuses for good grades. Beyond budgeting, my dad was big on investing, so when I was 12 and had managed to save $500 he took me down to the bank and had me buy a GIC — I picked the term, compound vs simple interest, etc. — which involved talking to the teller myself (also good for a socially anxious kid). When I was in undergrad he had me open a brokerage account and buy a stock to invest my summer job money in for future tuition. Because it was only ~1-2 years away from being needed he guaranteed to cover any losses if that happened.

  • MakintheBacon

    Sounds like a well-thought out detailed plan. Baby bun will most likely be very money savvy before he graduates grade school. 🙂

    My parents never paid me for doing chores or getting good grades. They actually wanted me to focus more on my grades, so I only worked during the summers and part-time during my last year of high school. Looking back at it, I wish I did work during school, then I probably would have had better time management skills and would have handled my first year of university much better (and possibly more money).

    • save. spend. splurge.

      I hope so! I want him to be money savvy and smart.

      I worked during school and came out the better for it. I know parents want kids to focus on grades but frankly, there’s a lot of free and idle time if that’s all you do.

  • Kassandra @ More Than Just Money

    I distinctly remember my mom surprising me with a one-time gift for being an Honour roll student for two years straight. She was impressed that I was a self-started and wanted to recognize my success. Other than that, money was a hard thing to come by as a young child unless it was a birthday, Christmas or I found money on the ground and picked it up!

  • NZ Muse

    I really am not worried about education for my kids. Student loans are from the govt and interest free if you remain in NZ. Personally I think housing (buying AND renting) is the biggest issue in this country).

    I am not diametrically opposed to allowances, I’m just not sure what the best way to handle those is if we go down that path. I briefly got an allowance as a kid and basically saved it all.

    • save. spend. splurge.

      That is really incredible. INTEREST FREE?.. My goodness.. I had to pay 5% and 8% for the privilege of borrowing $60,000.

      I never got any money and hoarded everything I did get.. but it mysteriously disappeared in my bank account when I went to go claim it.

      First lesson of life: Never trust anyone to touch and manage your money, not even your father.

  • Shermie

    Just a comment on good grades and a child’s education. Both my children are grown, and have graduated university and gone on to have successful careers, so I have seen the public education system all the way through to graduation. I never thought that the schools alone would entirely educate my children. I saw too many parents sloughing off their responsibility and believing that their child’s education would just take care of itself. If you want them to succeed then you should also enhance their learning experience at home. I read to my children from a very early age and then as they got older they read to me. I made sure homework was a priority, and learning and exploring new things was fun and positive. We took just as many visits to museums or cultural events as we did to the water park. If they needed supplies or something to make their learning process better, then we provided that. I did not pay for good grades but I set the foundation early that doing well in school was part of their contribution and their responsibility.

  • Morgaine

    You’ve brought up some really good points, some that I hadn’t really thought of. I was planning on giving my kids an allowance ($1 per week based on age, starting at 5-6) just so they get used to handling money and saving for what they want that may be a bit more expensive or an extravagance that I wouldn’t want to pay out right for (i.e. a videogame). Teaching them to save (at least) 10% of even a weekly allowance from the beginning and saving for items they want should be good life lessons they will (hopefully) carry on with them into adulthood. As well, I’m not sure I’d want to deal with a kid constantly asking me for money or to buy them something. An allowance would be a way to avoid that and say “well, save your allowance and you can buy that yourself”. I would also expect them to save at least part of any money they receive from birthdays/Christmas. I like your idea of them saving for their own education using the child tax credit.

    As you said, though, that doing chores and being a helpful member of the household should be an expectation, not something to be paid for. So, I’m kinda leaving this open for now. Perhaps see what kind of kid we get (spender/saver) and make that determination later on. I also agree on showing them money and how its budgeted so instead of saying “we can’t afford that” (heard that all the time from my parents which caused an eye-roll from me) it can become “its not in the budget this month”. I’m going to keep this post in my email so I can refer to it later 🙂

  • Gia T.

    Haha! Love the bit about grades. I once asked my dad to reward me for my good marks and he said “I’m already paying for your education, it’s YOUR JOB to get good grades.” Needless to say, I am doing the same with my kids.

    Ksenija makes a good point about cultural differences, and it’s kind of the same thing in the Philippines. There, parents are expected to pay for their kids’ education and living expenses until they graduate college; it’s seen more as an obligation/gift to make sure the kids have as little financial burden as possible starting out in life. But of course, that comes back around when they get old and the kids are expected to do the whole filial piety thing.

    I’m going to help my kids out with school as much as I can (so they hopefully won’t need to get student loans), but they are definitely going to work their butts off for scholarships and grants first!

    • save. spend. splurge.

      Yep! My parents never told me that it was my job to get good grades. We were all self-starters.. but I just really liked school.

      I don’t want filial piety. I can’t trust that Baby Bun and his siblings won’t be bums. I’m not putting my retirement in their hands.

  • Money Pincher

    I totally agree with you not giving kids allowance or money for their chores. Growing up, all the money I get to keep was from the lucky money that I receive from Chinese New Year (ranges from $25 – $100 a year) up until the end of high school. My parents would buy us clothes that we need at the beginning of the school year and that was it. I was NOT allowed to work until I finished high school. I gave ALL my earnings from my summer job in university to my parents and they paid for my tuition. After I graduated from school I pretty much had zero balance in my bank account.

    The Husband on the other hand receives $20 for every “A” he got from school.

    • save. spend. splurge.

      Wow your parents were really tough on the money business. I want Baby Bun to handle money, but not necessarily waste it without knowing that he is wasting it. He can do what he wants with it, but I want to show him the choices and consequences of doing so.

  • Ksenija

    Growing up, in my immediate surrounding, no one of my friends had an allowance or got payed to help in the house. An honestly, we got to know this concept through American sitcoms. Even when we would get money from relatives for birthdays or such, we had to give the money to our parents because they were the ones who knew what to do with it. I don’t believe I started carrying cash with me before I was 14 and that was only to have for emergency, like take a cab to go back home if the public transportation is not working. The family upbringing is of crucial importance, but it also really helps if the kid is surrounded with other kids who come from families with similar values.
    I also do not believe in paying for kids college education cause frankly if they’d been so stupid and lazy not to earn a scholarship or work and save money, they probably do not deserve the chance for that education.
    It is very interesting to observe cultural differences when money is in question. For example, in south-east Europe it is considered a family shame if you’re kid is working through high school or college. That means that basically you are poor and have no money to support your kids and therefore you’re quite low on the social ladder and not accepted in the society. When I got my first (grossly under-paid) job at the age of 15, my mother was equally devastated as I was joyful. When I worked as a cleaner to pay for my education, she begged me not to tell that to anyone. My friends have similar experiences.
    There is another side to that coin, though. As they get old, they fully expect their kids to attend their needs in many ways including financial. It goes without saying that they are included in your family life, you’re taking care of their health, housing etc. And of course, the ultimate betrayal and defeat in life is if they send you to a retirement house. So the first half you spend as a salve to your kids and the second enjoying the fruits of exploiting them.
    It is a sick circle that not many people even notices are in. One of those un-written rules of life. However breaks free from it, is an outcast, degenerated by the ‘western world’ influence, lunatic, a total social abnormality.
    Either way in life you choose, the society will make you feel miserable.

    • save. spend. splurge.

      That is true that family upbringing matters a lot, as well as who you hang out with. I’ll have to screen Baby Bun’s friends.

      That’s interesting that kids working through college = poor. We see it as a work ethic thing, being independent, industrious and responsible. I also don’t want them to pay for my retirement so they should learn how to work to save for theirs.

  • Anne @ Money Propeller

    Your plan sounds a LOT like how I grew up, no explicit chores or allowance, but an expectation that we were contributing members of the family. The major difference being we didn’t have to fund our resp ‘s, but we did know about the government 20% and we were expected to contribute everything we possibly could to the cost of our educations.

  • Taylor Lee

    I totally agree with not giving kids an allowance or paying them for chores.

    On the other hand, I remember when I got my brother and I got our grades from school (always straight A’s) our parents would do a little something, like take us out to eat or make our favorite meal or sometimes even just slip us a $20. It was more of a congratulatory thing than a paying for our grades though, since I’m pretty sure if we’d gotten even one B my mother would’ve torn out all her hair.

    Also for educational savings, I just don’t think that’s at all feasible for our family. We live in the US and a private school would be $150k or so for four years. While I personally was lucky and got a lot of scholarships, I know my (hypothetical future) children won’t necessarily have the same opportunities as I did because we’ll likely be in a higher income bracket than my folks were (which means my kids will qualify for less free money). In general I don’t think it’s feasible for any kid to save up that kind of money, and I’d find it upsetting to restrict my child’s educational access and give them fewer opportunities than I myself had.

    One really cool think I remember my mother doing with me and which I’d love to pass onto my kids, is that she would allocate a budget for me ($200, say) for new clothes for the school year because all mine were raggedy and didn’t fit. I’d get the cash just handed to me and was responsible for making sure I had enough clothes to wear for the year. I could save a little off the top for myself if I was being particularly frugal, but also knew if time came to get another set of pants before the next school year I’d be fronting the bill.

    I also remember my mother was self-employed, so while I had normal household chores I’d do for free, she’d sometimes pay my $3/hour to help her make copies, send letters, and do other work related to her business. Which was a nice little boost to my piggy bank and helped me understand what she did every day a little better.

    • save. spend. splurge.

      The U.S. is pretty crazy for tuition. $150K sounds normal to everyone there but that’s a king’s ransom here. I think by my last count, tuition is about $7000 a year.. could be $10,000 now but it is nowhere near $150K.

      I like that idea of allocating money. I am going to buy clothes and things for Baby Bun anyway, so it would be a good idea to let him manage that money and choose what to buy to understand how far money goes.

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