Do you still give allowance if your kid works?

[disneysteve]

My daughter is taking a babysitting certification course. She doesn't have any immediate prospects for actually working for anyone, though once she is certified, I'm hoping something will turn up. So it got me thinking about allowance. If she starts babysitting on even a periodic basis, she'll earn a lot more doing that than what we pay her in allowance, so do we still need to give her allowance? Just curious what other parents are doing. If your kid works, does allowance stop?

[Spud]

Disclaimer: My daughter is 1.

Does she get her allowance for doing extra chores around the house, or does she get it for being a member of the family? I think I might offer her money for doing extra chores around the house at this point -- mowing the lawn, cleaning the windows, etc. But things like clearing the table and keeping her own room clean are a part of being a member of the family and should be done (w/o $$) before anything extra is done.

[KellyB]

I would say to keep giving her the allowance. Then she can see how working ADDS to her financial situation, rather than takes away. Otherwise, she might decide to NOT work and just get the allowance.

[sweeps]

Otherwise, she might decide to NOT work and just get the allowance.

Well, that is how it works in the real world.

[disneysteve]

I would say to keep giving her the allowance. Then she can see how working ADDS to her financial situation, rather than takes away. Otherwise, she might decide to NOT work and just get the allowance.

I thought about that, but I figured she only gets $10/week allowance. Babysitters get about $8/hour around here, I think, so one babysitting gig for 2 hours will earn her more than a week's allowance. I suspect she would quickly figure out that it pays to work.

What I might do is cut the allowance in half, because $5 is really for her to use toward school lunches and we would continue to be responsible for that. We pay it as part of allowance for her to learn to manage that money and make sure she doesn't overspend and leave herself short.

[zetta]

At 12 or 13 I think I would still continue the allowance. Babysitting may be very sporadic at first, and the important thing is that she consistently has some money to learn to manage. It needs to be enough to cover more than just her lunch needs, so that she can buy a few wants but not too many.

Maybe at 16 if she had a regular afterschool job I would take it away.

[disneysteve]

At 12 or 13 I think I would still continue the allowance. Babysitting may be very sporadic at first, and the important thing is that she consistently has some money to learn to manage. It needs to be enough to cover more than just her lunch needs, so that she can buy a few wants but not too many.

Agreed. I guess we'd have to see how regular the babysitting money became. If she got a regular, recurring job, that would be different than if she was only getting something now and then.

[pearlieq]

What is she expected to use the other $5 for now? Is it just for her personal enjoyment?

I think she's awfully young to be losing her allowance just because she starts babysitting. I could see stopping it if she was 16 or so, but she's just a little girl. Her babysitting money should be going toward a long term goal like college or a car and the frivolities of a normal, happy young lady--clothes, outings with friends, hobby supplies, and the like.

[disneysteve]

What is she expected to use the other $5 for now? Is it just for her personal enjoyment?

I think she's awfully young to be losing her allowance just because she starts babysitting. I could see stopping it if she was 16 or so, but she's just a little girl. Her babysitting money should be going toward a long term goal like college or a car and the frivolities of a normal, happy young lady--clothes, outings with friends, hobby supplies, and the like.

True. Again, I think it would depend on the amount we're talking about. Our niece got a babysitting job when she was a teen that earned her a small fortune. A neighbor with twins hired her to take care of the kids every day after school until one parent got home. So she was working about 3 hours/day, 5 days/week the whole school year. Of course, they also used her to sit when they went out. I don't know what the rate was at the time - maybe $5/hour or more - so she was making at least $75-100 every week. At that point, $5 from us wouldn't be very significant.

[aida2003]

Our niece got a babysitting job when she was a teen that earned her a small fortune. A neighbor with twins hired her to take care of the kids every day after school until one parent got home. So she was working about 3 hours/day, 5 days/week the whole school year. Of course, they also used her to sit when they went out. I don't know what the rate was at the time - maybe $5/hour or more - so she was making at least $75-100 every week. At that point, $5 from us wouldn't be very significant.

Here's a spinoff question from the other thread: Did the money get reported to the IRS or did it stay "under the table"?
I'm pretty sure you're going to educate your child about a RothIRA when your DD's babysitting seriously takes off. Then the $$ will have to be reported. I've also read that to inspire investing some parents match dollar to dollar or 50cents : 1 dollar their kids' earnings for RothIRA's.

[disneysteve]

Here's a spinoff question from the other thread: Did the money get reported to the IRS or did it stay "under the table"?
I'm pretty sure you're going to educate your child about a RothIRA when your DD's babysitting seriously takes off. Then the $$ will have to be reported. I've also read that to inspire investing some parents match dollar to dollar or 50cents : 1 dollar their kids' earnings for RothIRA's.

I don't know what my niece did. If my daughter starts earning significant money (more than an occasional $10 or $20), I would definitely encourage her to open a Roth and yes, I would help fund it by "matching" some or all of her money.