When I was small, my mom would put a dollar's worth of nickels in a dish on a high shelf in my bedroom each week. There were certain chores that I was expected to do every day, like make my bed and put my clothes away. Whenever I would not do one of those chores, she would take away a nickel. At the end of the week, I got the amount that was left as my allowance, and the dish would be replenished with nickels to equal one dollar again.
That system worked well, but it was based on punishment. I did not get money as a reward for work, since I was expected to contribute to the household chores, but rather money was removed for disobedience.
When I was in fifth grade, my mom changed her tactic. I was still expected to do household chores, which had increased by then to include things like laundry and dishes and cleaning, but punishment would not be related to money. She told me that she would give me $40 each week, but I was to keep a strict budget. She glued envelopes to a poster to hang in my closet. Each envelope had a designation and an amount. I believe the breakdown was:
Category / Percentage / Amount
Tithe / 10.0% / $4.00
Savings / 10.0% / $4.00
Vacation / 10.0% / $4.00
Miscellaneous / 20.0% / $8.00
School Lunch / 22.5% / $9.00
Clothing / 20.0% / $8.00
Gifts / 7.5% / $3.00
[Total / 100.0% / $40.00]
*Tithe: I gave 10% each week first to God. Whether to my local church, a visiting missionary, or a Christian charity, I was giving the first 10% to God to thank Him and acknowledge that every blessing I have is from Him.
*Savings: 10% of my allowance went into a savings account in my name at the bank. This savings account is how I was able to afford a down payment on my first house 10 years later!
*Vacation: I saved 10% of my allowance in cash to take with me on our twice-yearly trips to see family in central Missouri and any other vacations that we took. This cash covered any expenses that come with vacation - souvenirs, car trip entertainment, and any other special purchases.
*Miscellaneous: This was my personal spending. I used this to buy things for myself or to go on outings with friends, like to buy a movie ticket or ice cream.
*School Lunch: Lunch at my school was $2, and my mom charged me $1 to take my lunch. Given $9 each week for this category, I had to take my lunch at least once a week. If I brought lunch more than once, I got to keep the leftover money for miscellaneous.
*Clothing: I had to begin buying my own clothes. I had no idea how much my parents spent on my clothes! This was a real eye-opener, and I discovered the beauty of buying second-hand and stalking sales at my favorite stores. My parents helped out with big purchases, like athletic shoes and winter coats, but I did not get new ones every year like some kids - I wore things until they were worn out or didn't fit.
*Gifts: I bought my own gifts to take to friends' birthday parties, and I bought gifts for immediate family (parents) for Christmas and birthdays.
My allowance was increased every couple of years, to $70/week by the middle of high school.
It seems like a lot of money up front, but I am pretty sure my parents ended up spending less on me this way, saving them money and a lot of whining and asking for things all the time from me!
I am so thankful to my parents for instilling the idea of a budget in me when I was so young, so that it was natural to me as an adult. The categories and percentages have completely changed now, but the basics are the same - give some to God, save some, spend on necessities first and personal second, and give some away.