Caroline has five responsibilities: make her bed, brush her teeth, take a bath and show respect. For these things she earns no money, she must do them because they are her responsibility. She is part of our family and there are certain things that each member of the family is responsible for.
She has three chores: feed and water the dog, put toys away and clean her room. For completing each of her chores she receives a quarter, so each day she can earn up to 75 cents. If she doesn't do a chore she doesn't get paid. But if she does something extra she can earn more money, for example last week she helped me dust the living room, she earned a quarter.
So we gave Caroline three jars: Spend, Save and Give.
The spend jar is for the things that she wants to purchase (right now she is working for a Hello Kitty diary that costs $6). The save jar is money that will be put into a savings account. And the give jar is for money that she can put in the collection basket at church. We let her decide where she wants to put her money. We want her to understand the value of saving her money and being able to purchase something that she really wants and we also want her to understand the value of giving.
She is doing really great at it. She has given money in the collection basket since we started. She has saved almost enough for her Hello Kitty diary. And she has save $3.
We want our kids to understand money. We want them to understand that debt is not good. We don't want them to have the idea that they are entitled to things just because they want them and because it makes them feel good. We want them to know that just because you want something doesn't mean that you go out and purchase it with a credit card and pay for it for the next 10 years. Bottom line, we want them to learn from our mistakes.
Caroline is really looking forward to getting to go to the mall to purchase her diary. We are planning a trip to the mall for the end of the week. ;-)