Do your kids get an allowance?
When I was a kid, we didn’t get an allowance. If we really needed something my parents got it for us, otherwise we did without. However, most experts say – and I agree – that an allowance is a good tool for teaching kids about money.
But an allowance is a lot of work for both parents and kids. So many questions need to be addressed:
- Should the kids get an allowance once a week,
- Should they be required to save part of the allowance,
- Should it be a reward for good behavior or doing chores,
- Should we have a say in how they spend the money,
- And how much should they get?
Our family has been through many incarnations of the allowance, but no one method seems to stick. It is definitely time for an allowance redesign.
How Much?
First and foremost, determining the amount is important. Some recommendations have been $1 for each year of age or for each grade level (i.e. a fifth grader would get $5 each week). But I think it is important to consider what we are expecting the children to buy with their allowance. If the allowance is just for “extras” and fun stuff, the amount may be lower. If we expect them to cover lunch money and certain necessities (and put some in savings) maybe giving a little more is justified. About.com has a good allowance calculator to check out.
How Often?
Paying out once a week has worked for us. I have the kids keep an allowance checkbook of sorts. On Sundays, we sit down and add the new allowance so they always know how much money they have.
Should They Work for the Money?
The going advice is that allowance should not be tied to chores. But I have a hard time just handing over money for free. As adults, we don’t get paid without working – wouldn’t that be nice?
I have certain expectations from my children. They have to do their homework, practice their instruments, pick up after themselves, fit in a chore or two a day to help out around the house (maybe more over the summer), and do it with a good attitude. Charts and checklists help them stay on track – but we don’t keep these up every week. I don’t take away their allowance if they don’t accomplish everything, everyday but I reserve the right to exercise my judgment. If they start slacking, I use the allowance as a reminder and incentive.
How Should They Spend the Wealth?
Every time they hit the snack machine I cringe but if that’s how they want to spend their allowance… However, I do make them put half, each week, aside for savings. Parenthood.com has a great article called Raising Money-Smart Kids: Allowance and Savings with some good kids allowance guidelines. In fact they take the savings concept one step further, and I quote:
For young kids, Harman recommends three glass jars: one is for spending now, one is for short-term savings, and one is for long-term savings. “It’s the jar that becomes their bank account that then becomes an investment account and starts to build their future and their net worth.” Allowance, gifts and earnings should always be divided among the three jars.
Some other bloggers have also pondered the allowance system. Check out their ideas at the following links:
When Should Kids Get an Allowance by Justin McHenry at Zen Personal Finance
Money Problems by dahGurl at The Parenting Post
How Do You Teach Kids the Value of Money by J.D. at Get Rich Slowly
Also blank chore charts are a helpful tool for parents when it comes to calculating an allowance for kids.
{ 5 comments… read them below or add one }
So far, I haven’t been able to get a system for allowance that we’ve been able to stick with—but i certainly think it teaches important concepts if done the right way. I believe the kids definitely need some chores tied to it also. I wasn’t able to get a system for one child and now i’m concerned because i think my second child is ready to start with allowance. how will i be able to keep track of two? or have the money on hand when it’s payday??? i am often borrowing money from my kids already —maybe they need to start giving me an allowance! thanks for making me think about this.
Patty,
Instead of a cash allowance, we have tried a checkbook type system. Each week the kids record their allowance in their “checkbooks”. When they buy something using their allowance we subtract it from their checkbook. My neighbor has consistently used this system with success.
The checkbook allowance is a GREAT idea! After all, as adults, how often do we actually use cash?
It’s funny, but I never had an allowance as a child, my husband did. BUT, guess who is better at budgeting??? me.
Nilam,
Hmmm. Maybe they should come out with Quicken for Kids
Neena, We think so much alike! Enjoyed this post very much as well. Have a great day, Sherri