Ask 10 different parents about giving their kids an allowance and you will get 10 different answers. And those answers can be very charged – you know what I mean… “Well, I would NEVER pay my kids to help out around the house”, OR “I can’t imagine NOT paying my children for every A on their report card”, or some other type of comment that lets you know real quick like what all ‘good’ parents do. Ahem. So relax because this is a no judgement zone where we can discuss the fact that there are several approaches to this whole allowance thing and you have to choose what you know to be best for your child and your family.
There are a lot of good options out there, here are the basics:
A regular allowance given with no strings attached…
This method is to simply give the kids their allowance without any requirements of them. The money is not attached to good behavior or whether or not they do their chores. This might be the choice for you if your goal is to teach your children how to manage money, and they are expected to help out around the house without being paid to do so. With this approach your child is getting money to manage on a regular basis, even if they forget to take out the trash.
Will work for food…
Okay – that was a little dramatic, but you get the idea. You regularly give your kids a set amount of money, but only if they complete the chores that you have established. You can also associate an allowance with other things such as grades or behavior. If you want to give your child some incentive to do their chores more consistently or to work just a little harder in school, then this will be a great approach for your family and may be a positive way to help your child improve in needed areas.
Do you think I’m made of money?
You don’t have to give your children an allowance. Really. You don’t. It won’t kill them and according to Kimberly Palmer in an article for US News – ‘The Smart Way To Pay Kids An Allowance’ - it may not be very helpful. I’m not sure how reliable the findings are, but it does make sense that paying an allowance may actually hinder your children when it comes to learning money management, especially if you do nothing to teach them about how to properly handle the money they are given. Additionally, for some of us, giving an allowance may simply not be possible in this economy. However, that doesn’t mean that you cannot seek to educate your children to the best of your ability about money management.
It seems to me that how you go about giving an allowance might not be the most important thing. As I have been reading, two issues keep coming up – consistency and training. If you are going to give an allowance do so faithfully. Follow through by talking with your kids about how to manage what they have. Talk to them about saving a portion of anything that they earn. Teach them to give generously to others by making contributions to your church or to a charity that is important to them. Help them understand that it is not wise to spend every penny that they make on themselves.
I was talking with Eva this morning about the allowance conundrum and she remembers getting her allowance and having her three little envelopes to divide it toward church, savings and spending. One of our downfalls when she and her brother were little was a lack of consistency with giving an allowance so I was thankful to know that we did it enough for her to remember. In upcoming posts we are going to talk about how much to give your child, how often, and how to best use an allowance to teach solid financial principles. Then we will begin to talk about creative ways to help older teenagers become good money managers as well.
How do you handle the allowance issue? Is it helping you achieve the goals that you have for your child/teen?