Shaping Stewardship Habits in Children Using Allowances
“He decreed statutes for Jacob and established the law in Israel, which he commanded our ancestors to teach their children, so the next generation would know them, even the children yet to be born, and they in turn would tell their children” (Psalms 78:5, 6, NIV).
Years ago, I had the privilege of preaching a series of sermons at a Seventh-day Adventist Church in Salvador, Brazil. There, I got to know an extremely poor family. A mother and her four children shared a single room. They were struggling to have enough food and adequate clothing, and toys were not in the picture. I shared to my wife and children about this situation. My daughter’s reaction, a seven-year-old at the time, surprised me. She prepared a bag with clothes and toys, setting aside among the best she had. Deeply moved, she said: “Dad, I am very happy to share what I have.” She understood the blessing of generosity. How do parents nurture their children for them to experience the joy of giving?
This article presents useful tips for building stewardship habits in children, highlighting the practice of giving them an allowance.
Providing an Allowance to Children
Children who have not yet learned the four fundamental operations of arithmetic will only be able to “pass on” tithes and offerings that their parents give them. It is an important practice during the early stage of life since it strengthens the positive behavior of giving. However, as they grow “bigger,” I don’t think that just handing over a coin or bill in the offering plate, something that belonged to their parents, would be the best way to convey giving principles. A monthly or weekly allowance which gradually increases with time could contribute to the educational process.
Giving a child an allowance is extremely important when teaching about financial management. It represents a powerful means to teach how to manage money and to learn about its value and power. The inspired counsel from Ellen White encourages the exposure of children to the practice of handling money: “In the study of figures the work should be made practical. Let every youth and every child be taught, not merely to solve imaginary problems, but to keep an accurate account of his own income and outgoes. Let him learn the right use of money by using it.”
A variance to the practice of providing an allowance would be to encourage children to accomplish some selected tasks in exchange of remuneration. This should not include chores that the child is responsible for. Practically, parents would create a list of specific tasks and allocate a monetary value to each activity. Children can voluntarily choose the tasks they would like to accomplish for a compensation. This will help to forge the association between work and money in the mind of our children.
Teaching About Managing Allowances
When a parent gives an allowance, it is also necessary to monitor its use. Simply handing it out doesn’t accomplish the goal. Each child should learn to divide the allowance received by taking into consideration three basic destinations: (1) donate, (2) save, and (3) spend wisely. Depending on the ages, envelopes in different colors or decorated boxes can be useful for sorting it out.
When it comes to giving, one should learn to first set aside tithe and offerings and then make provision for humanitarian aid. A tithe and offering envelope should be given to the child so that, as soon as possible, they may return what belongs to the Lord. Parents should help the child to give using the proportionality principle. For very young children, the best way to do this is by physically counting. For example, when the allowance is $20, consider giving 20 one-dollar bills. It helps to easily split the allowance and place the tithe and offerings in their respective boxes or envelopes. Younger children tend to enjoy counting, and this activity will help them to understand the proportionality principle. Offerings delivered systematically like this are called Promise.
At this life stage, there is a greater willingness to donate. If we want to see the new generations grow in generosity, we should provide instructions and opportunities for them to give during this very special period, which passes by so quickly.
Each child should also be guided to establish a goal of acquiring something according to their interests. It should be something achievable within a period of time for which they can wait for. As the child grows, the waiting time can become longer. To achieve this “dream,” a certain amount of the allowance will be set aside in the “save” envelope or box.
An allowance is a great means to teach the basic notions about investments. The money set aside as savings can be deposited into a fixed-income investment or a savings account. Even knowing the limitations of this investment, it can be used to help the child understand that there is a “place” where money is kept and it increases. As the child develops, other fixed or variable-income investment options can be experimented with as well. We recommend that parents and guardians seek to increase their knowledge about the financial world, for them to guide their children prudently and effectively on this journey.
It is important that a child, supervised by parents or guardians, acquires the regular habit of spending on healthy or useful things. We have received this insight from the writings of Ellen White: “Whether supplied by their parents or by their own earnings, let boys and girls learn to select and purchase their own clothing, their books, and other necessities; and by keeping an account of their expenses they will learn, as they could learn in no other way, the value and the use of money.”
The management of allowances offers continuous opportunities for children to grow in financial literacy. Some children will want to spend everything, whereas others will prefer to save all. Through practice they will learn to find a balance. Let us be graceful to accommodate mistakes. Marcos Bomfim explains how, by giving his daughters a certain amount of money to buy their personal hygiene products, they soon started preferring the more economical products. 
Frequency and Type
Experts have advised that younger children, who are still developing an understanding of monetary value and have a less established ability to wait, can receive their “income” every week. Younger children (up to seven or eight years old) are not yet ready to understand abstract concepts. Their notion of time is still maturing. Shorter deadlines are easier to assimilate and understand. In addition, the monthly allowance may seem like a lot of money for a child, distracting from the three purposes of money described above. As the child matures, they can receive a monthly allowance. The idea is to remain sensitive to the child’s development stages.
In a time when many families no longer handle physical money and the use of cards as means for financial transactions grows, many may ask about giving card money to children. We recommend that parents or guardians provide the allowance in cash to younger children. This will help them better understand the value of money. During this development stage, it is harder to grasp the meaning of card money.
Parents, teachers, and guardians, we wish that the generation that God has entrusted to us be properly guided into eternity by our teaching and, above all, by our example. May they learn to recognize God as the Source of all good. In response to the Lord’s great love, may they experience the joy of sharing and the blessing of living a generous life, not one centered on self.
 Counsels on Stewardship (Washington, D.C.: Review and Hearld Pub. Assn., 1940), 294.
 Marcos F. Bomfim, “Teaching Children Financial Stewardship,” Dynamic Steward 24, no. 2 (2021): 16, 17.
The management of allowances offers continuous opportunity for children to grow in financial literacy.