No cash? Try the no-cash allowance solution.

no-cash allowance solution
A child’s written allowance account

The no-cash allowance solution solved my problem.  Seems like I never had the right amount of cash to pay my kids.

One day, I grabbed a piece of paper and wrote their allowance as a number. Consequently, that turned out to be one of my best mom inspirations as it led to the creation of The No-Cash Allowance.

A No-Cash Allowance is a system in which a child controls all funds received from parents through a written account initially kept in the home. Adults act as bankers and the child as account owner.

Money as a number

Now I realize it was that one simple change–from paying with cash to paying with our version of direct deposit that set the stage for our children to learn how to manage money as a number. Their allowance appeared as a number in their home account, a written log of all their money transactions.

Most importantly, the one rule we were committed to from the beginning was that we would not pay our children with cash. Because we were their bankers they could withdraw cash from their accounts, but surprisingly they rarely did.

Using the debit card concept

My kids quickly adapted to managing their money as a number. Instead of withdrawing cash they used me like a debit card. I paid for all our purchases. They substracted from their written account.

This was back in the 1980s before debit cards became popular. My kids didn’t seem to care how they paid for their purchases. What they did focus on was whether or not they had enough money.

Turned out that kids understand numbers when it comes to money. As a result, all they needed to know was their bottom line. This no-cash solution was going to work!

However, making a decision to buy something meant that they had to subtract from their balance. Voila! Their balance got smaller. Good lesson, I thought.

By finally adapting a no-cash allowance solution, our family was able to  create a financial education at home. Allowance became the tool for teaching our kids about money, decision-making, and responsibility.




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