Comments on: How To Give Your Child An Allowance

By: Liz

Liz — Tue, 09 Mar 2010 14:34:41 +0000

My kids (ages 7 and 9) each get $5 per week. $1 goes into each of Save, Spend, Donate, Invest, and then there’s a discretionary $1 that they can allocate as they see fit. “Spend” is for day-to-day spending, small items, impulse buys. “Save” is for longer-term planning (they each saved up and paid half the cost of the Nintendo DSs we got them for Christmas last year), “Donate” goes to a cause that they care about (most recently, aid work in Haiti), and “Invest” gets aggregated and invested (via Sharebuilder) annually.

They are learning that if they don’t have money they cannot spend it, and if they spend it they will not have it. They are setting goals and sticking to them, and are learning the importance of helping others, of giving back to a society/system/community that allows us to live a life of comparative luxury. My husband and I have ultimate veto authority over their purchases (just because they have the money for a thing doesn’t mean they can get it), but have rarely had to use it.

We do not tie allowance to chores – in our family, being a member of the family means you do stuff around the house. The last thing I want is an attitude of “how much will you give me for it” when I ask/tell my kids to do something.

Also, we don’t give them cash, we have a dry erase board on which we track “deposits” (weekly allowance) and “withdrawals” (money they spend).

So far, it’s working for us. At some point, the allowance will increase, along with the list of things we expect them to pay for themselves. I have a feeling, also, that the frequency will decrease — they’ll get a certain amount per month rather than per week, for example.

By: Patrice@SeekWisdom

Patrice@SeekWisdom — Tue, 09 Mar 2010 12:53:07 +0000

I like the idea of giving a general allowance because its a true opportunity to teach your children how to budget. Growing up, I received an allowance for maintaining good grades and being an overall respectful kid. Chores were just apart of earning your keep. When I went over and beyond or came home with straight As, I received what could be considered a “bonus!” If I got the notion to be sassy or lazy (which was rare), then no allowance.

One thing about the allowance that I appreciate my mom teaching me is that when it was gone, it was gone! If I didn’t budget it propertly, I could potentially starve at school all week. She also gave me her rules for shopping, which were: #1 If you didn’t bring money, don’t ask OR be ready to pay me back as soon as we walk in the door OR I’ll return it AND #2 General school clothes came with a Parent Price Tag. If my mom’s Parent Price Tag for jeans were $30 and I wanted $75 designer jeans, I’d better have the difference plus tax! Great lessons! “Figures”

By: Mike @ Gather Little By Little

Mike @ Gather Little By Little — Tue, 09 Mar 2010 12:15:00 +0000

@Josh,

See, I don’t think there is a perfect system.

If you give money to do the chores, you are telling them that chores are related to money. That could deviate your goals to make them understand how to manage money and that sometimes, helping for free is great too!

But, if you give money to your kids no matter what, you can surely put the emphasis on how to manage this money but you can also show them that money is free and that you don’t have to work for it as there will always be someone to pay for you in the end.

In my opinion, I prefer paying them for chores and show them that money is hard to gain. However, I will certainly have some discussions about the importance of not just doing things for money. I guess that by not paying for every chores in the house (which would be quite extreme), we can reach a balance.

thx for your comment!

Mike.

By: josh728

josh728 — Mon, 08 Mar 2010 20:26:04 +0000

Tying an allowance to chores is just about the worst thing you can do. As parents we don’t get paid for doing the dishes or mowing the lawn– these are just things we do for the good of the family. By tying allowance to chores we give powerful incentive for our kids to do nothing if they decide they don’t need money that particular week.

Much better to give an allowance and make it just that– AN ALLOWANCE, that they can budget and spend as they like.

The BIG caveat on this is that you have to hold firm and make your child buy just everything they want using their allowance. You want a snack at the grocery store? You spend your own money. A video game? The same. We’re willing to spend X amount for sneakers. If you want a more expensive pair than you make up the difference.

Do this and watch how quickly your child learns to prioritize and manage their money.

By: mb

mb — Sat, 06 Mar 2010 04:39:12 +0000

good overall post. my family does give “cash advances”. we write them on the calender and enforce paying the money back. not having any cash the next alowance tends to discourage borrowing. relatives with childern have all decided if the kid is old enough to ask for money/ stuff, the kid is old enough to have spending limited to a set amount by alowance.

By: MITBeta

MITBeta — Sat, 06 Mar 2010 02:52:32 +0000

It seems to me that paying kids for chores is different than an allowance. In the first case, kids have a choice: Do chores and get money, or don’t do chores and don’t get money.

In the second, chores are expected as a part of the membership of the family, and money is allowed to all members, some more than others, as part of the membership of the family.

By: Mike @ Gather Little By Little

Mike @ Gather Little By Little — Fri, 05 Mar 2010 12:52:07 +0000

@Jolyn,
this is a great idea to auto discipline your kid. He is the only one responsible of how much he will receive a the end of the month… very close to the “real world” reality!

By: Angie

Angie — Thu, 04 Mar 2010 18:38:43 +0000

I found a great piggy bank with four slots-Saving,Spending,Donation, and Investment. My 7 year old gets a dime for each chore he does and he usually earns between $2 to $3 a week. We divide the money up 25%Save,15%Spend,10%Donation, and 50%Investment. He is saving for a Wii, Spending goes for icecream or small toy, Donation has not been decided yet, either food pantry or Humane Society. Investment is for a car or college. He loves to earn money by doing his chores so he can put money into the 4 slots each weeks. I am so glad that we finally found something that works for us.Good Luck!

By: Roshawn @ Watson Inc

Roshawn @ Watson Inc — Thu, 04 Mar 2010 18:19:34 +0000

I never received an allowance but rather got paid for certain chores. I guess this is another option.

By: Jolyn@Budgets are the New Black

Jolyn@Budgets are the New Black — Thu, 04 Mar 2010 17:57:05 +0000

I devised an allowance system for our 14yo where he receives a set amount each month, and he’s expected to so certain chores and generally help out around the house as asked. Then, if he doesn’t do a certain chore, he is required to pay a certain amount to the person who had to do it for him.
This is a work in progress, but it is working out brilliantly. No more nagging! Money speaks to him much louder than I ever did.

figures

;)