How Our 1st Year of Family Economy Worked

Last January, I was following Ralphie of the Simply on Purpose Instagram account and she mentioned the family economy that they do. We’d had the kids help out with household responsibilities previously, but it wasn’t quite as organized as I … Read More

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Last January, I was following Ralphie of the Simply on Purpose Instagram account and she mentioned the family economy that they do. We’d had the kids help out with household responsibilities previously, but it wasn’t quite as organized as I wanted.
I’d also always struggled with how I wanted to teach our kids fiscal responsibility. Neither Dan nor I grew up with an allowance, and money was always considered “family money.” Our needs were met, but we were encouraged to think about the money in relation to how it helps or hinders the whole family. I loved that collaborative feel, but knew I also wanted my kids to have hands-on experience with managing funds, donating, giving, etc. The family economy system seemed like it would be a great fit.
And it was!! We loved it. While we didn’t adhere to it as strictly while we were traveling, we followed it pretty darn closely our entire time at home this year. Here is how we structured it in our family.
HOW WE INTRODUCED IT
 
We couched this as, “you have the opportunity to help with family responsibilities, and when you do, you have the privilege of helping manage family funds.” So it wasn’t totally a “you’re getting paid to do chores” (because I want them to have a sense of responsibility to the family regardless of whether they get paid) but more of a privilege to help direct the funds.
So for instance – because you’ve shown us how responsible you are with helping clean the kitchen, you can have the privilege of taking this family money to determine the best baseball glove or to decide if it’s a good use of money to purchase treats. So it’s still family money, just routed through the children to allow them the responsibility and understanding of it.
RESPONSIBILITIES AND PRIVILEGES
We structured it so that each kid earns their age each week (e.g., our 7 year old earned $7, etc.). The idea is that as they get older, they’ll take on more responsibility for the family, thus meriting more money. I know some families have kids pay for clothes and such, but we decided that since clothing is a basic need, we would cover that (it also means I get more say in their styles ;)), but they would pay for any specialty items (e.g., leotards, baseball pants, etc.).
Additionally, we’d pay for activities (since as parents, we feel it’s our job to give them opportunities to learn and grow and develop skills), but they’d pay for any equipment needed/desired for those activities.
They are highly, highly encouraged to put 10% into tithing to our church and 30% into savings. We provide a bonus 10% deposit on any savings accumulated each quarter (thus incentivizing them to put extra into savings).
Each child gets to choose whether to participate in the family economy, but they’ve never chosen to not participate. I’ve been surprised with just how motivating it is to them. It’s significantly cut down on nagging for responsibilities, which I really appreciate.
Each child does still have a few things they are required to do regardless of whether they are participating in family economy (e.g., practice violin, brush your teeth, etc.).  The total available is 15, and they get full earnings if they get 14+, or can memorize a scripture to make up the difference if they get 12+. If they get 11 or fewer points in a week, they still earn $1 for each day they earn all 3 points available (morning, afternoon, chore).
Actual charts are below if they are helpful to see!
HOW WE TRACK
No need to make this complicated. We printed out the simple charts with a grid across the bottom with morning/afternoon/chore for each day Monday-Friday. Then we laminated it so we can check it off and then erase at the end of the week and reuse. Nothing fancy or particularly cute, but it gets the job done.
For now, we only do “digital money.” We have a Google Sheets spreadsheet and we track everything in there. If they choose to spend their money on something, I purchase it with my credit card for ease of tracking, then deduct it from their spending money, and make a note in the comments of what/where/when/how much. Every Saturday, they come up individually and we review their sheet, I ask them if they’re choosing to pay tithing, if they have anything they’d really like to purchase, if they’d like to put any extra in savings, etc.
If you’d like to use the same spreadsheet, here’s a link to a BLANK copy. You can click File > Save a Copy to save your own version.
WHAT HAS SURPRISED ME
 
They’re really motivated. Like I said, they’ve never actively chosen to not participate. There have been a couple weeks when they haven’t had quite enough points, but they were almost entirely right after returning from a trip when we were trying to get back in the swing of things. It’s cut way down on nagging, and they tend to complete tasks more efficiently. It’s great.
They understand! They totally get how it works, and even if they don’t always remember the exact amount left, they get that they are working and helping the family, and get to use some of that family money. They also really loved using their money to
They’re really good at saving. I thought once they had money to manage that they’d buy all the little knickknacks and treats, but they’ve hardly purchased any at all. They’re really good about adding extra to their savings accounts, and the LOVED using their money to purchase Christmas gifts for each other. That was really happy to witness. They truly have come to love to use their money to help others.
LISTS
 
Here you go. They’re also in the same BLANK FAMILY ECONOMY spreadsheet – there’s one tab for tracking the money and one tab with the charts.
I hope this helps and please let me know if you have any questions!

8 YEAR OLD