May is "Money Matters" month on the website. This month we'll take a look at what we're learning and sharing, from each other and from experts, about financial matters. Starting with this week's Choice Mom query: As parents who might expect more help from our kids, but with one paycheck, how do we handle allowances?
Posted May 2, 2010 at 11:20 AM
Q&A: How do we handle kids' allowances?
Q&A
A Choice Mom in the banking industry admitted that the subject of allowances with her three tween children has never been her strong suit. She asked other women what they pay, what responsibilities are required, whether all chores were included or eventually became more of a "contributing role to this family" expectation, and how to decide what Mom pays for compared to a child's wish list from the pot.
This has been a tough area for me as well. I've experimented with many things. When they were under the age of six, they would win points that I would cash in for simple prizes -- I didn't trust their spending. Now that my daughter is nearly 11, and my son is 6, and we're saving for a big European Adventure this summer, I'm asking them to do certain big jobs to make certain big income. My daughter benefits more from this, of course. She already has a regular babysitting gig with the minister's family, and has been helping me with Choice Mom business. I'm trying to get her to see household chores as part of our responsibility and maturity, and am treating her younger brother the same, even though I know I expect less of him.
The five year age difference between them is a challenge there. But my daughter is starting to see that her time IS worth money, which is an incredibly valuable lesson -- I think especially for girls -- and she's proving to be a hard negotiator.
Currently, I'm not doing regular allowance, but am helping them find ways to earn their own money. Including yard sales and cleansing toys and books for the occasional second-hand store sales.
I'm limiting their ability to spend the money on whatever they want, however (candy, plastic, books just like what they haven't yet read). But that's where I'll have to begin to let go.
I'd love to get input from women here about their thoughts on this topic, and will solicit the insight of some of our many financial planning experts in the Comments field below.
Reader Comments
Posted May 18, 2010 at 9:49 PM
I did some research before deciding to give my daughter allowance. Like so many other issues there is no one right answer. I found different experts with different opinions. The two basic ones are -- give a child allowance for doing specific chores or just give a child an allowance with no strings attached.
I chose the later as I feel there are certain things my daughter needs to do as part of our family of two and I did not want them tied to money.
Her allowance of five dollars a week gets split into her spending money and her savings. My daughter added a third category, money to buy American Girl items.
Her savings does not get used and she seems to clearly understand this. When it comes to spending she is very careful how she spends her money. For example, if we're in a store and she sees something she wants, I've told her that she has money and can us it to buy XX item. She thinks about it and if it's something she really wants I put the money out for her and she repays me when we come home. However, more often than not she decides she does not want to spend her money on XX and we move on.
However, when she does use her money she takes great pride in doing so.
Good luck moms, remember there is no right or wrong answer,
Clair
Posted May 6, 2010 at 11:15 PM
I give my nearly 13 year old son a weekly allowance commensurate with his age.
Since he was fairly young, he has had a
"Moon Jar" (<www.,moonjar.com>). This is a wonderfully simple product which teaches children to split their funds into thirds: sharing, spending, saving.
Every year my son chooses a worthy cause to donate his "sharing" portion (and often more). He also donates his own money to religion school and his class decides on one or more nonprofits to donate the total to at the end of the school year.
I do not tie allowance to chores or help around the house. These are things which are expected as a family member. Similarly, having fiscal responsibility is part of being a member of a family. It has been very rewarding to have my son save for something that he wants and to put money into his savings account.
Posted May 3, 2010 at 5:40 PM
My seven-year-old son began negotiating for an allowance a couple of months ago. I gave it a lot of thought and realized that I hold three things to be important.
1.) I, too, think children should know that chores, helping out, are part of the responsibility of being part of a family. So they have chores that are not connected to payment or allowances.
2.) Since money confers certain powers - like decision-making - I want my children to have a share of that sense of empowerment. I want them to know that I share with them what I have, without conditions. So they have allowances that are not connected to their performance of their chores. (So far, I have not had any problem getting them to do chores.)
3.) I also want my kids to learn that they have the responsibility and the privilege of earning their money. So I am identifying additional tasks they can do to earn money, after their regular chores are completed. Interestingly, my daughter happily does her chores and squirrels away her allowance and that is enough, while my son is becoming very eager to accumulate money and gets through his chores quickly so he can have the privilege of doing additional work and earn more money.
Since my twins are just turning eight, this isn"t expensive yet. I"m not sure where it will go from here but for now (in our third month) it seems to be working well.
Posted April 29, 2010 at 2:39 PM
What a wonderful idea to have May as Money Matters Month. This is a really important area. Children need to understand money. I wonder about paying kids in your home for doing chores. Chores should be part of what we do in a loving home to make it work for all of us. Chores have to be done, no matter what. If children see that chores are part of life, that they really are needed to do them, then the children get a sense that they are not cosmetic additions to the family, but vital links in the machinery that leads to the smooth running of the home.
Posted April 29, 2010 at 11:45 AM
Nancy, a pregnant Choice Mom who attended the Austin event, shared with women the titles of several good books to help educate kids about money. For those interested:
The Totally Awesome Money Book for Kids - written by a woman and her son, who is about 10, I think
The Kids’ Money Book by Jamie Kyle McGillian pub Sterling
The Stock Market by Donna Jo Fuller pub Lerner
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Posted July 6, 2010 at 2:28 PM by Heidi
I've tried a number of different allowance styles. The one that we are trying now, and seems to have worked the longest, is making a list of the priority things I want my 10 year old daughter to do (this includes getting her homework done before she comes home and going to bed on time/quietly, but also includes chores like cleaning her room and the bathroom) and paying her $.50 for each one accomplished. The number of these items adds up to the possibility of earning $10 (!) a week, though because some of these are so difficult for her to do, the most she has earned in one week is $7; it's usually between $3-$5. And she now has to pay for most of her own toys, snacks, and clothes I don't feel are necessary. At first she spent most of it on candy, chips and soda. But in the past few weeks she actually saved up $20 for a hair-straightening iron! I was so proud of her.
I've just started a rule that if she receives $5 or more (earnings or gifts), 10% goes into savings.
She has other chores that she doesn't get paid for - feeding the dogs, picking up their doo-doo, etc. And she'll learn to do her own laundry soon. I'm tired of washing clean clothes she pulls out of drawers that land on the floor and never get picked up til they land in the laundry hamper!