Giving Your Children An Allowance

[jeffrey]

By Rexanne Mancini

When we consider that the word allowance means, “allowing for,” it puts that “A” word into better perspective.

Children will need access to their own stash of cash when they reach a certain age. Kids develop this need around age 8 or 9 and it grows into the monster it will become by about age 15 or 16 ... they do get more expensive with age, don’t they?

At age 8, we began giving our older daughter money for each A on her report card and for each 100% on tests. We receive flack from other parents about it to this day. Mainly, their argument is that children should do well in school because they “want to.” Is this the same as “just because?” Sounds like it to me. I think parents are afraid to reward their kids for good grades simply because they feel this will set a bad example. But a bad example for what? That if they work hard and do well, they will get rewards? Isn’t that precisely how the world works? We still think it’s a good idea, even 4 years later.

This same daughter gets an allowance plus her good grade money. She can spend her “own” money on whatever trips her wire. She has learned not to squander everything on one momentarily gratifying purchase, she’s a whiz at making sure she’s given the correct amount of change and her shopping savvy is positively inspiring. She also must put ten percent of her money in the bank. It’s an amount not likely to be missed, but teaches her the benefits of “paying yourself first.” She’s amassed quite the savings account!

My younger daughter is in first grade and beginning to demand her share of the booty. She now gets money for perfect test scores and for a “good” report card. She receives a lot less than her sister but she’s 5 years younger and hasn’t learned to tell the difference ... yet. She also gets a small allowance. She knows how much she has to spend and is learning the rituals of managing her own money, too.

While some children don’t really care about going to the mall or buying their own special treats, most kids do care ... an awful lot. Children will begin craving all sorts of pricey, impractical things by a certain age. A good alternative to spending a fortune catering to their whims is teaching them to save for frivolous luxuries. If they want something impractical that we can’t rationalize buying for them, they’re on their own.




A potential problem I see occurring when children don’t have their own money is a possible desire to steal, be it from their parent’s wallet or something cool they feel they have to have from a store. Without the ability to “earn” or make the money fairly, they might feel the only way to attain something they want is to take it. Naturally, we teach our children that stealing is wrong but when kids, or adults for that matter, feel helpless they tend to take morality into their own hands. Besides, kids need to learn fiscal responsibility. I think the earlier we allow them to experience the rewards and triumphs of good spending habits, the better judges of value they will become.

One controversy is paying children for doing chores. This is a tough call. I have just begun implementing mandatory chores in our home. Considering it’s never been one of my better parenting abilities, I’m still struggling through the details. I have been known to threaten their allowance if they don’t do their chores but it doesn’t really work the way I want it to. My older daughter decides if it’s “worth” it at that point and that’s not the point at all, is it? So, I’m backtracking on this one and being firmer about chores just getting done and trying not to threaten their livelihood.

I think allowance is a great teaching tool when given in the spirit of generosity and practicality. It’s never too early to learn or teach responsibility and when we consider that allowance is a good math lesson, we’ve just added to our children’s knowledge base considerably.

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Rexanne Mancini is the mother of two daughters. She maintains an extensive yet informal parenting and family web site, Rexanne.com Visit her site for good advice, award-winning Internet holiday pages and some humor to help you cope.

[JLP]

My wife and I pay our boys $1 per week for their age (capping it at ten years old!!!). We require them to tithe and put 25% in both long-term and short-term savings. The remainder they can pretty much spend how the choose.

So far it has worked out well.

JLP

[Armywife]

The "A" word has recently made its way into our home via our second grade diva-in-training. DH and I decided to create an allowance contract complete with terms and policies that were carefully read and discussed before she signed up for this responsibility. I am not entirely happy with the sum but it has eliminated a little "sticky fingers" problem that was occurring far too frequently. It's a good way to get the kids into the habit of having some money and how to use it responsibly IMHO.

Barb

[JLP]

Originally Posted by Armywife

The "A" word has recently made its way into our home via our second grade diva-in-training. DH and I decided to create an allowance contract complete with terms and policies that were carefully read and discussed before she signed up for this responsibility. I am not entirely happy with the sum but it has eliminated a little "sticky fingers" problem that was occurring far too frequently. It's a good way to get the kids into the habit of having some money and how to use it responsibly IMHO.

Barb

I think paying your kids an allowance is a good move. They need to learn the importance of budgeting and saving up for something big. My boys just recently bought themselve a small "boom box" for their bedroom. They were so proud of themselves.

I pay them every Friday. I make them come into my office and they sit down and I open up my spreadsheet file and show them where their money is going. I make 4 piles (Tithe, long-term savings-25%, short-term savings-25%, and spendable) in front of them so that they see what's going on. The spendable money they can spend on whatever they want. However, lately, they have been combining it with their short-term savings so that they can save for something like a book or game or something like that.

So far, the system is working.

JLP

[Armywife]

Originally Posted by JLP

I pay them every Friday. I make them come into my office and they sit down and I open up my spreadsheet file and show them where their money is going. I make 4 piles (Tithe, long-term savings-25%, short-term savings-25%, and spendable) in front of them so that they see what's going on.

JLP

This is why I love this forum.. so many creative ideas!!! Thanks JLP for sharing. You've inspired me to add a short-term, long-term amendment to the plan I've arranged thus far... I also think it is a brilliant idea to pay them on Friday and make it a "family money management time".. we definitely need to make our children aware of the importance of managing money early on.

Thanks again,

Barb

[PrincessPerky]

OK so my kids are a bit young and my family is abit generous with straight loot, but I am not giving my kids money when I know they wil come out of ALL holidays with plenty of loot (even the mini ones), I might reconsider when their needs are bigger, but only if we have more loot then .

Actually I would rather they looked into a mini job, I am sure my neighbors would pay to have a kid take out the garbage or something, I would! Not much, but I would.

[JLP]

Originally Posted by PrincessPerky

OK so my kids are a bit young and my family is abit generous with straight loot, but I am not giving my kids money when I know they wil come out of ALL holidays with plenty of loot (even the mini ones), I might reconsider when their needs are bigger, but only if we have more loot then .

Actually I would rather they looked into a mini job, I am sure my neighbors would pay to have a kid take out the garbage or something, I would! Not much, but I would.

Regardless, you should still probably sit down with them to plan how they spend it.

I look at allowance as money that a kid is "allowed." Now, with their allowance, all other small purchases made by me or my wife are finished. If we are at the store and they want a pack of gum, they buy it. Of course, we have the power to say no if we think they are making a mistake. But, for the most part, we let them do with their money what they want.

JLP

[autowoman]

I didn't get an allowance per se. I was told that if i wanted anything I had to go around the neighborhood and ask people if they needed their lawn mowed or toilet cleaned.

[lenbevy]

I love what everyone here is doing with their children and money. If only more people did it. I'm the President of Young Money dot com. We have a challenge that tests people on their financial knowledge and rewards them for taking the challenge. Our goal is to change behavior for the positive.

[moneybags]

I don't place any requirements on my childrens' allowance. For me, the point of the allowance is for them to learn how to manage their money. I will suggest that they save, donate, etc., but it is not required. If they blow their whole allowance or savings, it is a lesson learned, and we will definitely discuss it. I feel that by placing rules on the allowance, it puts me in control, which defeats the purpose.

[christopherp552]

Me too. I allow my kids to spend on their own, but I always tell them that they have to spend within their means.

[zairaong]

Giving a child an allowance has many benefits, and it teaches responsibility in your child. And deciding what to tell your child about money and finance will depend on his or her age and the ability to understand what money is, as well as where it comes from and what it is used for. It educates children on the importance of saving money today, and for purposes later in life. Giving children allowance guides them in the right direction towards making spending decisions and it also educates them on the importance of savings.

[Leroy]

I was just thinking about it, and I've never had an allowance. I'm 16, and my sisters and I were expected and still are expected to do chores around the house. We vacuum, wash dishes, walk the dogs(don't really count that as one lol), pick up dog poo, take care of the trash, and clean our rooms. Now that I'm 16, I babysit and make my own money. I rarely ask for money. Do you give your kids an allowance? When does it stop? Do you believe that it is better to not give an allowance to your kids?