How to give your kid an allowance

My six year-old son has started half-heartedly asking us about pocket money. It's a little early yet, but it's gotten Rael and me thinking about the allowance question. We both got allowances as kids, but his was a weekly payment and mine was a cash-for-chores deal. We're of two minds about paying our kid to work around the house...shouldn't that be part and parcel of responsible family living? How to proceed?

My stylish friend Liv reports that, when she was 12, she got a $25/month clothing allowance. She learned early on to balance splurges on Guess jean jackets with creative Goodwill shopping. Not only did she look good, she also learned excellent money management skills.

Here's how Dennis manages his 11 year-old daughter's allowance:

She gets a set monthly amount (right now it's $10/month but will soon go up to $20). She can have it all at once at the first of the month or in weekly or bi-weekly installments. We're trying to teach her how to manage money. It's fun to have money and it's a powerful feeling to have lots of savings. Our rules for purchases are that the money is for books, toys, etc. and anything goes but her money is the sole source for these kinds of extra purchases. We originally offered loans if she didn't have her money with her but one time we got into a big fight about how much we loaned her and now it's a cash-only affair. I'm happy to report that after a few rough spots over the years, Kate has $80 in a savings account and is very good with her money (which is why we're going to raise her allowance). [Update: Kate's bank account is up to $140 after a very profitable holiday season.]

Chris passes along this link:

The Indy Star reports on a prepaid "allowance card" that helps parents and teens track their spending, avoid running up huge bills, and open the dialogue on spending and saving.

How do you do the allowance thing?

Comments

[Marwan]

We give our older daughter, who is eight, a weekly allowance. She can also earn more money by doing extra chores around the house. We noticed a big improvement in her understanding and handling of money right after we setup a bank account for her. She was very excited to have a bank card. She is really into depositing her money in her account and watching her savings grow. Also, she now thinks twice before spending her "savings".

[Lance]

I don't recall how we came up with the rule (read it somewhere) but we give each child age/2 dollars twice a month (when I get paid).

The allowance is separate from chores, but they can be docked $$ for particularly heinous misbehavior (only has happened a couple times).

As with Dennis in the quote, this is their money to spend on "extras" and is strictly a cash-and-carry operation. I've thought about instituting a sort of checkbook for them, but the overhead is more than I care for.

[Judie]

In our family, household chores mean life skills. What I mean is they are learning basic household responsibilities that are necessary for living. Everyone needs to learn to vacuum, scrub the floors, do the laundry, clean the bathroom, you get the idea. Mommy and daddy won't always be around to pick up after them. So, with that said, allowances for those life skills aren't given. It is simply a family responsibility to keep our home in harmony.

Our children are paid by doing other things not only around the house but beyond the house. They are paid for jobs that we might otherwise hire out. Babysitting, landscaping duties, the yearly washing of windows, vacumming and washing the vehicles to name a few. We have rental property, so they help us do any repairs and maintenance. Our children range from 4 -12 years old. They all help and they all receive money.

We feel the most important thing about money is how to budget what you earn. We teach them how to donate some, save some for college, cars, missions, etc., and spend some.

[decompiler]

we started our daughter with an allowance when she turned six (she'll be seven this valentine's day). we use a pay-as-you-go system where the normal allowance amount is around 50 cents to a dollar, depending on the quantity and quality of the work.

there is a twist, however. these are the rules:

- if she does some work around the house with minimal prompting, then she gets "the usual" amount.

- if she does some work around the house without being told to, she gets about twice as much.

- if we have to tell her multiple times or if we get attitude back, she still has to do it but gets no allowance.

- if after multiple requests the work still isn't done and we have to do it ourselves, we actually charge her "the usual" amount out of her allowance!

using these rules over the last year has resulted in her working harder around the house when she wants to save for something (she has saved up to $24 for something she really wanted), and it has also minimized the number of times we've had to ask her get something done, because she knows that we will charge her for our services if we have to clean up for her.

[T]

When my stepdaughter turned teen and decided we were mistreating her by asking her to do chores, she convinced the British Columbia Ministry of Family and Children that we were abusing her as child labour and they gave her her own place to stay and a monthly "allowance" that exceeds the "fun budget" currently enjoyed by the entire remainder of her family.
The Ministry expects this situation to continue until she is old enough to collect welfare, even though we have been fully investigated by the RCMP and found to be decent parents.
Where's the lesson there?

[Mike]

My daughter is not old enough to have an allowance, but I don't really see the need for one. I don't want her to become hooked on consumerism and spending as a way of life, like something you do just because you can. I think its not good for anyone to get some cash and go spend it to get a temporary thrill. That said, I think some people have a fixation with frugality that comes right out of the Great Depression, which I think is equally harmful. I don't think fear of insecurity and financial troubles is something you want to organize your life around. Our understanding of money seems to center around either temporary gratification of desire or stinginess driven by fear and insecurity, and neither of these approaches to life feel adequate to me.

I think we should use what resources we have in ways that support our efforts to grow as people. We should ask ourselves whether we are buying something as part of a conscious program of growth, investigation, expression, learning, development and appreciation, and that we don't expend those resources thoughtlessly, because we can or as away to temporarily allieviate some pain or discomfort like boredom. We should be mindful of our resources and use them wisely, not wastefully. That doesn't mean don't have fun, but make sure that you fully appreciate your fun, and strive to experience it fully. I think its only when people go on vacation to somewhere like Disneyland that they fully engage with their own experience. Why can't we do that during the more ordinary times too?

A family exists to support the growth of its members, both children and adults. Giving each member a slice of the pie encourages them to think of themselves as as separate from each other, not in a supportive relationship, but an antagonistic relationship. Ideally, a family should be unified enough that it can come to a consensus on how to allocate resources for specific purposes. Even children can participate in this process, and I think it teaches them to be conscious of the needs of the group and to have empathy and an investment in the growth of each member. Rather than giving them an allowance, which encourages them to ignore the needs of other family members, and think of it as an exclusive right that must be defended.