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Monday Q&A | Kids & Money + Children’s Birthday Parties

Every Monday, I answer a few of the questions that my readers send me. If you have a question you’d like me to answer in a future Q&A post, just leave me a comment here or email me (thefrugalgirl [at] gmail [dot] com) and put Q&A in the subject line. I look forward to hearing from you!

Your entry on your family size and being green got me thinking about the topic of kids and money, and I would love to hear how you’re raising your children to be responsible with finances. What do you do about allowances? Do they get an allowance? How old were they when they started, how much do they get, and do they have to earn them? tithe on them? save from them?


Our kids do get an allowance (we started this around the age of 3), and at this point, it’s not tied to a specific job or chore (though they certainly do chores and jobs around here!). We do sometimes pay them to do jobs that are over and above their normal assigned chores.

Our kids all have banks with three sections in them…one is a church, one is a store, and one is a bank. When they get their allowance, it gets divided up between these categories. 10% goes into the church, 40% goes into the bank, and 50% goes into the store. We take the church money with us on Sundays, of course, and the money in the bank section is for very long-term savings, like for a car or for college.

The store money is theirs to do with as they please, and it’s very interesting to watch how differently they each handle their store money. Joshua is a natural-born spender, so his store money section is usually empty or nearly empty. Lisey, on the other hand, is a born saver, and so though she has no more income-earning opportunities than Joshua, she’s usually got a nice pile of cash going in her store. Sonia is somewhere in between, and when she’s low on money, it’s usually because she’s spent it buying things for someone else. Zoe doesn’t really do much shopping yet, so it’s hard to tell what her money personality is.

This simple system we use with our kids teaches them some very valuable lessons. They’re learning:

  • to give away some of their money
  • to save for future expenses
  • that they can’t buy everything they want. When they’re out of spending money, they’re out of spending money, as we operate on a cash-only basis around here (no loans from Mommy and Daddy!). This has been a little bit painful for them on a few occasions, but we hope that these experiences will stick with them and will keep them from poor financial habits later on.

We’ve been grateful to already see that some of these basic financial concepts are sinking in, even with the spendiest of our children!

My daughter will be 2 in June and I want to have a frugal birthday but still invite a lot of family and have tons of fun. Do you have any suggestions on how to do it? Since she is so little, should I just keep invitees to a minimum? This year, I only invited very close family and friends because I thought she could get overwhelmed if I had a lot of people and I still managed to spend quite a bit.


First off, I should say that I don’t think that there is a right way and a wrong way to do children’s birthday parties, and what works for one family may not work for another. That said, we have chosen to keep things simple and low-key for our children’s birthdays. I find that enormous gatherings are a lot of stress, a lot of expense, and are not that much fun for small children.

Zoe just turned 4, and for her birthday, we just had a small birthday dinner with the six of us. We made a birthday cake for her, gave her presents, and after the birthday dinner, we all went out to the pet store and bought her two goldfish (that was one of her presents). We all had a fun time together, and I did have to lose my mind planning a huge party.

Our older children usually invite one friend over for their birthdays, and they often have a sleepover with that friend. It might seem sort of boring to have one friend instead of a houseful of friends, but my kids enjoy having the one-on-one time time with a friend without being distracted by the presence of many friends. Also, because only one person is being added to our household, I’m able to do more fun activities for the birthday celebration. It’s easy to take the kids swimming, or to do a craft or baking project (I’d be loathe to attempt that sort of thing with a bunch of guests).

If you do decide to invite a number of people over, I’d suggest trying to keep things simple in order to cut down on the cost. Have a kid-friendly menu (at our house, the birthday person picks the menu, even if it’s an odd menu choice!) and don’t worry about trying to impress the adults with the party fare (since her party is in June, maybe you could have a hot dog and hamburger cookout). Don’t feel like you need to purchase piles of birthday decorations, or do elaborate party favor bags (I don’t usually do traditional party favor bags…we usually make or bake something together, and the finished product is the party favor).

Probably my best advice is to keep in mind that it doesn’t take a lot to make a two-year-old happy. And along with that, remember that a stressed and financially strapped Mommy is no fun for a two-year-old!


Readers, as always, feel free to chime in if you’ve got some advice to add to mine.

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Friday 31st of December 2010

This bank is adorable and so clearly laid out.

I'm never sure how much allowance is reasonable. We haven't started allowances with our kids yet...

I did loan my daughter (who was 6) money and carefully kept track so she could pay it back (which she did with a few reminders that in life you pay your debts off first). It's the opposite approach from you since I felt loaning money and having her pay it back would help to keep her from poor financial choices later on. It seems to have worked (so far lol...). In the past year she hasn't asked to borrow money from me again. I think she likes the idea of saving and having the money instead of having the debt.

Non Consumer Girl

Saturday 24th of April 2010


I am trying to establish similar values in my 6 year old daughter.

Non Consumer Girl


Sunday 28th of February 2010

Hi all, I am new to this blog! Thank you Kristen for taking time out of your busy schedule to share great ideas! I am loving it! I love making birthday parties for my children really special without spending a lot and a friend of mine shared with me how she made a birthday cake for her daughters birthday. It was a cake made to look like the gown of a barbie doll. The directions for this are found at They have tons of other ideas for cakes and much more. I made this cake for my daughters 6th birthday and she really enjoyed it. I saved a lot of money and it was fun being creative and trying something new! I hope this is helpful. Have fun celebrating!


Thursday 25th of February 2010

Hi Sweetheart, I am so proud of you. Love your frugal girl ideas. We are very frugal at our house. We have a garden, can our food, we have chickens (48) for eggs and meat. We operate on a cash only basis, no credit cards, no debt other than our house payment. We both drive older vehicles but they are paid for. With economy being what it is today, we believe this is the safest way to go. We also can meat, chicken, beef and pork. I have tons of saving tips if you are interested. We are currently both working, thank the Lord. I am a clerk for the County Judge and Harold works for the County Road Dept. I kid him about playing in the dirt with the "big boy toys".

Would love to hear from you and share ideas. Love you, Clarice


Thursday 25th of February 2010

Hi! I just saw the CBN footage on you and I love it. You have really inspired me. Ever since I first came across your blog in my quest to reduce waste, make yogurt, bread, and live on less, I felt like you were talking directly to me and the needs of our family. I also have four kids and we also teach our kids about money and have three different accounts just as you do. Are you LDS? We are. We give 10% of our earnings to our church. The Lord blesses us immensely and we try to do our part by giving back to Him . I love your blog. I have told my friends at church and at my kids school about it. Thank you for your constant quest at frugality. If you get a chance between your thousands of emails, check out my Adventures in Homemaking blog. Thanks again! By the way, the yogurt has been turning out awesome!

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