Sahara Pirie describes her thoughtful allowance philosophy and system for teaching her daughter good money habits in the post Why We Don’t Link Allowance to Chores. She describes its evolution from Kindergarten to her daughter’s current age of 16.
Check out her 4 bucket setup:
- Play Now — immediate spending money,
- Buy Later — short term savings goals,
- Financial Freedom — passive long term investment income, and
- Give — charitable contributions to others.
Also note the introduction of the separate monthly clothing allowance at age 13 to cover basic needs — forcing her daughter to kick in for any trendy “extras.” On the bonus side of the ledger, the reimbursements awarded for any costs incurred sewing her own clothes is a brilliant idea too.
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