The Allowance Conundrum
The word allowance might conjure up images of trust-fund kids and seems to hint at getting paid to do nothing. Poll a few of your friends about whether or not kids should get an allowance and you’ll hear all sorts of answers. People seem to be in several different camps on this issue, including those who believe kids should:
1. do chores because they get a place to sleep and food to eat.
2. be paid by the chore to learn the value of working for money.
3. receive a set amount of money every week to do chores as needed.
4. be paid an allowance to learn how to manage money.
Michele Shimp is of Camp #1 but visits Camp #2 and says, “As for allowance, no, we don’t pay it. We decided that there are things the kids just have to do as members of the family: dishes, trash, laundry, feeding pets, cleaning room, mowing the lawn in the summer, the basics. However, they do have opportunities for money chores. These are chores out of the norm like cleaning the fridge, vacuuming the van, mowing a part of the lawn that is not their responsibility, cleaning a closet, etc.”
Weighing in for Camp #2, we used to have my husband. He used to pay a quarter per chore (called chore points) for things like emptying the dishwasher and gives maybe three chore points for something like cleaning the bathroom. Daniél Waters Minton has a different way of paying: “Max has always been able to earn money if he wants it. He gets 1 cent per minute, or 10 cents for 10 minutes, or $6/hour. I break it down because sometimes he’s only got 25 minutes in him. He can earn it by doing chores outside of his normal expected stuff or by babysitting his little brother.”
Joanna Nesbit of Camp #3 says, “We give our kids allowance. We don’t pay for chores, but we give a predictable set amount each week, and then we require the kids to pay for things like clothes (my 15-year-old), meals with friends, movies, toys, anything they want that is considered extra.”
And finally, Deanna Butler of Camp #4 says, “I give my kids a joke of an allowance in lieu of buying them things like packs of gum at checkout lines, etc. They each get $10 a month (even the near teen) and from that $2 goes into savings. Everything else they earn via their own entrepreneurial spirit.”
David McCurrach of KidsMoney.org says, “Remember, the purpose of an allowance is to give your children the opportunity to learn how to manage money through their own successes and failures and the input of their parents.”
No matter which allowance or chore camp you come from, here are some tips from counselor Andrea Ramsay Speers:
- Don’t link allowance to chores. Expect kids to pitch in with chores because they are a part of the family, not because they're getting paid.
- Teach them how to save by turning over a few regular expenses to them, and build it into how much their allowance is. For example, instead of you giving them money each week for their church offering, or for a snack at the arena, give them enough money in their allowance to cover those costs, and let them know that they are expected to remember their money and budget in order to have enough for what they need.
- Teach them not to buy on credit ("Mom, can you give me an advance on my allowance?") but instead to save their money and only buy what they can pay cash for.
- Don't base an allowance amount on age, base it on need and maturity level. Decide with your kids individually what each of them can handle based on experience and go from there.
- Don't forget that your kids are watching! Make sure you're modeling financial responsibility by not overspending, buying things you can't afford or putting too much emphasis on material goods.
Kerrie McLoughlin’s stance has changed, and now her teens mow the lawn in exchange for cell phone service.