Tag Archives: Allowance

Should You Give Your Kid an Allowance?

A question I get asked frequently by parents who call my show is, “Should I give my child an allowance, and if so, how much should I give them?” Here are my thoughts…

According to one study, the top reason parents give their children a weekly allowance is to minimize the time they have to deal with them. “Here’s some money, now leave me alone” is about as far as most of the so-called teaching goes.

However, allowances are important because they teach kids at a young age the very valuable lesson that you must earn the things you have.  The more your kids learn a sense of earning, the more they will respect money, the more they will respect themselves for earning it, and the more control they will have over their lives in the future.

Giving your child an allowance also teaches them about budgeting.  Kids who aren’t brought up with a sense of saving tend not to do well in their 20s.

I think a basic allowance should be based on your child’s age.  If they’re 8 years old, they should get $8; if they’re 15, they get $15, etc.  Now, what can your child do with $15?  Not a whole lot, but it’s the beginning of teaching them something about money and controlling impulses.

An alternative is to give older teens (15 or 16) a couple hundred dollars a month, and out of that they have to pay for everything: school lunches, their cell phone bill, any clothes they want, etc.  If they want something bigger than that, they will have to go out and earn money and/or do more chores.

What about using money as a disciplinary tool? My thought is that when you take something away from a child, he or she has to earn it back. Just taking away their cell phone, for example, doesn’t really get through to them because they know they’re eventually going to get it back.

However, if they have to earn it back, it completely changes the way they look at it.  If they’re late paying their phone bill, the service gets cut off. They really need to learn how to keep up with taking care of their responsibilities. Sit down with your child and say, “These are the things that are gone, and this is how you have to earn them back” (e.g. good behavior, good deeds, mowing the lawn, etc.).

When talking to kids about allowances, you should mostly discuss impulse control.  And that’s where you as the parent come in as a role model.  Do you have impulse control, or do you just irresponsibly spend?

Every moment is a moment to teach your child. Don’t miss out!

Kids’ Allowances: Giving vs. Earning

When it comes to the issue of whether or not to give kids an allowance, there are two schools of thought.

The first school of thought says a child’s allowance should be associated with work:

“The only way you get money is to earn it; there is no entitlement program in life.  If kids have to work for their money, they also will start to understand and hopefully appreciate how hard it is to work and earn money.  There may even be a miracle that takes place, and they will start to understand that Mom and Dad have to work hard for their money as well!”

Up until recently, the American ethic has always been that the only way you get money is to earn it (of course, in reality it’s not always that way – anyone keeping up with the Federal government bailouts?).  Even though Cinderella didn’t get an allowance, she still ended up with a prince, the castle, and a very uncomfortable glass slipper. 

The second school of thought advocates for parents to divide chores into two categories: family chores and extra chores

Family chores are chores children have to do because they are members of the family.  They don’t get paid for them; their reward is an internal sense of accomplishment that helps them develop a work ethic.   
Parents can also create a list of extra chores children can do to earn money.  Extra chores will teach your child to appreciate hard work and understand that earning money involves work.

For example, your children shouldn’t get paid for brushing their teeth, keeping their own space clean, or putting their toys away.  If you child doesn’t brush his or her teeth or clean up, you take away a privilege like watching TV.  But all chores in the home, like setting tables and doing laundry, are paid for with a salary on a weekly schedule.  If work-for-pay jobs are not done, then there’s just no pay.

Here’s what I think:

I really don’t see a huge difference between the two schools.  I think an extremely modest allowance should be given based on your child’s age.  It should be just enough to pay for little small things, nothing major.   For example, they can’t go out and buy a new pair of cool shoes.  You should also expect them to do minor chores for their allowance, such as keeping themselves and their room neat.  Everything else they can earn by doing major chores such as setting and clearing the table, or dealing with the garbage, dogs, and/or yard.  I don’t think you should withhold allowance because they didn’t do something or annoyed you.  I don’t think money should be associated with that. 

For the major chores, create a list with a price tag attached to each chore.  You can even post it somewhere in the house.  The list specifies what things they can do and what they earn for having done them, just like a restaurant menu shows what a particular meal costs.  If they want to make extra money, those are the chores they have to do.  That way they earn their way.  If they don’t earn the extra money, and then say they want to go to some event and don’t have enough money, you just tell them that they need to think ahead the next time.  It teaches them a powerful lesson.  If you just give them the money, it teaches them no lesson.  Instead, they’ll just think they’re entitled, and they’ll be on their way to buying things they can’t afford.

In addition, tell them whatever they earn will have to go into a bank account, some of it will have to go to charity, and the rest they can keep, save, or spend.  Putting money in the bank teaches them to save.  Tell them they can’t touch the money unless there’s something huge taking place (e.g. when they’re 15 and want to go on a special school trip, they can pull money out with the understanding they won’t have it for the future).  The amount given to charity teaches them to be generous. 

By following these steps, you will teach your kids to budget and manage their money, and control their need for instant gratification.