Lately she’s been using her spending money to buy gum and go to yard sales. If she runs out of ready cash in that jar, she may get more motivated to form long-term savings goals, but since she basically just stockpiled dollars for six months she has a cushion.

What I would like to do is implement a faux economy within a household, separate from an allowance system and using fake money. (I believe the Lancastrian school system used something similar.) Basically, every transaction has some value attached to it. If an individual does chores, each chore is assigned a certain value, which they receive in faux currency. (Bottle caps is a good choice for Fallout fans, but I’m pretty sure that anything would work, including just a spreadsheet.) Bonuses can be awarded for particularly good jobs. Any service rendered for an individual in the faux economy “costs” currency. Services rendered being like, doing laundry, cooking dinner, driving, etc. I think it’s useful for teaching children how our economy works, and it might potentially make them appreciate the work involved in running a household.

On the other hand, it is kind of mercenary, and you can’t exactly not feed your 4 year old because they’ve run out of faux currency… So the system maybe needs some tweaking.

I don’t remember how my allowance worked as a child. I believe I was given a set amount a week that had some fair system by years, and there were no chore requirements that went with it. As I got older, my parents paid me an hourly rate to mow the lawn (which was a fairly substantial undertaking) that was in addition to my allowance. Once I was in high school, the allowance calculation shifted. I believe at one point my allowance was probably as high as $25 or possibly $30/week. Before folks exclaim that was high – especially back then – also understand it was not practical for me to work very much, and my parents did not ever hand out money to me.

A percentage of it (let’s say half) was mine to do with as I pleased. For a while, I had a boyfriend who was a long-distance phone call away. I had to pay the phone bill for that and saved my allowance money to do that. Or perhaps it paid for me to go to a movie with my friends.

The other amount was allocated for expenses. Mostly that was school supplies and food (I was a pretty involved kid and was out of the house 3-4 nights a week). That amount of money was subject to negotiation based on my actual expenses. If I remember correctly, I could petition for a raise by providing 2-3 weeks worth of receipts for those expense and proposing what I needed.

Essentially, I also had an allowance in college. It was given to me in a lump sum for each semester. There were some expenses my parents would reimburse me for (I was an art major, so the structure of my school expenses was atypical). But the key word there was reimburse. I had to collect receipts, annotate them, and send them home with my accounting. They would review them and deposit the corresponding amount in my checking account (for which they had deposit slips).

I learned so much from all of that, and I wouldn’t trade it for anything. I never had anything like your milk bottle system, but it sounds fantastic. It provides an additional dimension about values that I’m still grappling with as an adult.