Whatcha Know About Kids Allowances These Days?
I don't have kids yet, but for some reason I've been thinking about them lately. At the moment I'm only practicing having them (aww yeahh!) but when it's game time, I'd like to be prepared. Or at least have an idea of what I'm doing. And this apparently includes setting up the proper allowance ;)From what I've heard, there are about a billion and a half strategies that can do the trick here - and people swear by each of them. For me, growing up with an allowance always meant one thing and one thing only. If I do my chores, I get paid. It didn't matter which chores these were (they differed as I got older and/or faster at doing them) but as long as I completed them on time I could bank on that hefty deposit each week.
And by "hefty" I unfortunately mean "$1 a week". At first it was awesome! One hole George Washington just for ME? It didn't get any sweeter than that as a 5 year old. As I got older though, I started seeing my friends whipping out the elusive $5'ers and $10 spots all over town. Where the hell were they getting those? There was NO WAY those fools were saving up more than I was, that's for sure. Looking back, I just assumed they're parents were "nicer" and thus gave them bigger allowances. I feel pretty bad thinking about that now - my parents were awesome! - but you know how kids can get...
At any rate, that was then and this is now. One of favorite pieces written on kids finance was an article by Janet Bodnar, the new editor of Kiplinger Mag, who recently suggested giving kids weekly allowances equal to half their age (where were you 20 years ago Janet?!) - I love it! And in return, she recommends giving the kids more responsibilities and having them pay for more stuff as well. Even better! Not only does this teach them how to budget better, but it also gives them more control at an earlier age. Not to mention helping them avoid that "jealous factor" from day one ;)
What do you all think? Have you found some interesting allowance plans? There's still plenty of time 'till we have to get down to business here, but I'm thinking Janet's route is the way to go. We'll get a lot of stuff done around the house, and our kiddies will learn the value of the hard earned dollar & how to prioritize. I'll just have to remind them of the cut off age before they start gouging us @ 25! You better believe they're gonna be sneaky little devils if they take after their father.
Labels: kids finance, life
posted by J. Money at
9:35 AM
21 Comments:
My boys get $10 a week from me. They are 14 and 12. There are no 'conditions' attached to them but they are starting now to see that they can use THEIR money for things instead of mom dishing out the cash all the time. This has only evolved in the past 6 months or so though.
Our child get one dollar for every year of life. With this he is expected to pay for extras: a toy or a special trip to MCD or DD. If he wants something that costs more than his weekly allowance, he has to save up for it and/or earn extra money around the house by doing jobs. The interesting part is how he tries to negotiate what amounts to an "allowance day" loan. I have explained to him that I don't give advances and that if I did, it would be a loan and I would charge interest. He is 8 yrs. old so he can understand the concepts. The look in his face when I explained loan interest was priceless.lol.
We got paid for doing stuff we had to do anyways, so I guess it was good that we got some cash out of it. My parents phased out allowances pretty early, since we were getting consistent work elsewhere (yard work, baby sitting, etc...)
my parents actually idd the half the age thing up until i was in middle school. Once they thought we were old enough to have jobs (babysitting and mowing lawns) they got rid of the allowance and we were just expected to do chores. Of course my parents had us cooking dinner and doing our own laundry starting at the age of 10...
I think they had us for slave labor and nothing else! ;)
We've got a 4 year old and we haven't started that yet. Although, she's gotten money just playing with our spare change. You'd be surprised how a little spare change could lead to a teaching moment. Our daughter had broken her favorite mug and we told her that she needed to replace it with her own money. So, she used her spare change to buy herself a new mug. We hope it's a little insurance she'll learn some responsibility for the future.
Jerry
www.leads4insurance.com
I don't think chores should be tied to money. It is the responsibility of everyone in the home to take part in caring for the home. I also believe that everyone in the family should have some money that they can chose to do with as they wish (within constraits for children - I mean, sure, perhaps they can get one candy with their money, but there is no way I going to allow every cent to be spent on candy on the same day!)
I don't give an allowance, we call it commission. In life no one gives you free money, and it is always tied to something. There are three jars, one for saving which will never be touched until they turn 18. Another for charity to learn the importance of giving and finally their spending jar which they can use how they want.
@Jolie - haha...well at least they're catching on ;)
@Anonymous - love it! I'd certainly have cherished $1 per year of life back then.
@Jeff@StretchyDollar - For sure, that makes sense. I wanna say I got an allowance up until the same time...at least up to the start of High School.
@MK - Haha, your parents sure were smart. I never had to do laundry, but I did have to set the table, clean up afterwards, mow the lawn, etc. Would had to have done them regardless of the money involved, but it was certainly good for learning. and spending!
@Jerry - That's cute :) I love how smart & full of life children are. I wish adults were more like that.
@pauper princess - I year ya, there's def. a balance that needs to be worked out with this stuff. I forgot to mention I heard an idea about giving teens an allowance to buy thier own clothes and stuff. So this way if they wanted to spend $50 on a t-shirt they could do it, but it would make more sense to buy a few @ $15 instead. Not sure how well this works in the real world, but in theory it's pretty interesting.
@Anonymous - That works out nicely, I like the charity one. Not sure about the label of "commission", but I get where you're going with it.
J,
Honey, lovely, sweetheart...
Don't give your kids an allowance. I grew up without one, as did my eight siblings, and honestly, it taught me so much better about the value of a dollar than the allowances my peers received on a weekly basis.
The reason, solely, as I saw it was that their parents never really withheld the allowances when the kid didn't complete their chores or whatever. Instead, to stem the whining and complaining, they gave them the cash anyway.
Also, I was brought up to understand that chores are something everyone does and that everyone is responsible for. You SHOULD make your bed every morning. You SHOULD put your dishes in the dishwasher. These are basic lessons that need to be instilled in children from the moment they're able because guess what? When you turn eighteen and the birdie has to leave the nest...no one is going to pay you to pick up your dishes.
Teach your children to be adults so that they'll know how to take care of themselves when they get to the proper age. You're not raising children...you're raising adults.
On the OTHER SIDE... I should make mention that although we did not have allowances growing up, this allowed my mother to be able to give us some cash when we wanted to see a movie with friends, or when we joined the soccer team and needed shin guards, etc. It allowed our family to better taper that cash toward things that would not only help us become better as people, but more socially active and instilled in our community. Most kids waste cash on needless items like ... oh... Pokemon cards and penny candy.
Save yourself the heartache. No allowances for kids, but a less-strict policy on paying for the things that will help them become more socially mature.
I don't think we got an allowance as such. At one point I got £20 a month into my own bank account by direct transfer which carried on until I was about 18 and subsequently closed that account. Would quite like to give my folks that back at some point.
One thing I remember that we did do is shopping budgets. When we went to do our weekly shop my sisters and I each took a basket, were given £10 each and told to buy enough for our packed lunches for the week (Mum was there too to oversee it all). This really taught us how to get the best value for money and that it's cheaper to buy stuff to make sandwiches than to buy those stupid kids lunchpack things.
Great post, very thoughtful topic!
My daughter's 6. Maybe I'm behind the times, but I feel weird about "employing" her in this way. She still does chores, but she's fascinated by money regardless. If she sees money laying around, she'll gather it together and see how much it's worth. Even if she hasn't earned this money outright it's still a learning experience for her to shop with that money.
@Her Royal Highness - Yup, totally agree that kids *should* do most of that stuff :) I still feel like giving some sort of allowance would help them to manage money at an earlier age though - I know it worked for me albeit w/ my mini allotments. I'm pretty sure I'd rather have them use this money wisely and learn how to prioritize than asking me or the wifey for money as they need it. But then again, only time will tell! Appreciate the comment though.
@Holly - CUTE! I absolutely *LOVE* that idea of having lunch budgets. OMG that is awesome. And totally trying that out one day...as long as i can remember by then ;)
@Henry - Oh yeah, playing around with money seems like a wonderful way to learn for sure - I can't wait to see why my little ones do w/ them!
One thing I'll point out here is that each child has a very different personality and different things work for different personalities. I'm not saying that different children should be given different allowances, of course. It is essential to be fair. But you need to take the personality differences into account when trying to teach your kids how to develop good money habits.
I have one boy who will save without it even being suggested to him. He "gets it" on his own. The other wouldn't put off spending one dollar today in exchange for getting ten dollars tomorrow. The delayed gratification concept does not click with him, at least not easily or naturally.
You have to be careful when constructing an allowance rule that it works for both personalities. You don't want to favor one over the other in that way either.
Rob
I like the half their age approach. We have been talking a bit lately about getting the kids on a chores and allowance structure at home and this might be a good starting place.
I also like the Dave Ramsey view of having commissions for the kids to complete their chores. Maybe structure it like here's your list of chores, here's the $ value for each one and have that add up to half.
Then they will still make what they earn by doing chores and it's not an all or none format. I also like having it so we could post it up on the fridge to give the kids transparency to how it works.
The best allowance plan out there is the one I have.. don't have kids. :)
I am the youngest of three, raised in a "broken home" environment essentially by a single mom. We NEVER got allowances. NEVER. However, if we were involved in sports or music, etc- my mom would struggle to make sure it was paid for and WE SAW THAT STRUGGLE. Which made the activity so much more worth it. And the whole family got involved in each person's activity- unlike so many of today's families who split off and all do something different on any given day. It was the same at my dad's house when I lived with him. I had to do my chores, no allowance involved. But I never had brand name clothes, we shopped for school clothes at Value Village and Payless Shoes. Every Year. We all got our Driver's Licenses at 16, got a job and paid for our own gas and insurance, saved up the money for our first cars (junkers- but they ran!) and any extras we wanted. Still no allowance, but if I needed money for some school trip, etc- all I had to do was ask. Did I? Not much, there was a sense of pride and accomplishment that I could be an adult at 16. And talk about knowing the value of every single one of my dollars!
My point is- out of 3 kids raised this way, 2 of us have gone out of our way to get college educations on our own with no support, own used cars outright (no loans), have bought homes and don't expect any bailouts (nor do we need them), etc, etc, etc. We are money smart but we learned it by living in an open household where money may have been a struggle, but it was talked about. We were allowed to understand and learn about money on real life terms. IE: Either we get the $100 shoes, or we have lunches. And we still did our chores and contributed to the household. So it can be done without Allowances. For Sure. :)
@Rob Bennet - good point, never even considered that stuff....there's a lot more to this than originally thought, eh? i guess i'll just be going with what *feels right* at the time and do the best I can. thx for the insight.
@Matt @ My Financial Recovery - yeah, that transparency part is key. as kids you do anything in your power to twist and turn the words in your favor ;) having everything laid out like that would prevent some of it which would be good.
@Anonymous - haha, that's certainly one way!
@NorCalRN - point well taken :) your momma sure did you all proud! love that. although i'm sure there are just as many stories about the opposite occurring as well. Lots of variables coming in and out of play here. i wonder how well it would have worked if you all grew up in an upper class household? I'd venture to say there's be the same outcome going with the same Mom in play...parenting is prob. the biggest factor over anything else, at least i hope!
I always had an allowance growing up, and as I got older the allowance grew. Especially since I was active in sports year round and didn't work because of it, it was a good way to have some money and feel independent from my parents, at the same time they didn't give me enough where I could go crazy. I think it teaches kids a good way to start savings.
I definitely think it's a good idea for kids to have (small allowances) and when they get older pay for their own clothes, lunches etc. But so many people say you shouldn't tie allowances to chores because they should be learning that they have to help out around the house, as part of the family....so I don't know whether allowance should be a separate thing, or what? Maybe for chores above and beyond the ordinary, like car washing or something.
@J. Money Let me tell you, J, I don't think allowances are a good idea in theory. Because you're teaching a kid that they receive money for doing chores, once the gravy train dries up - because they get too old or get a job, what have you - they'll still associate doing chores with making money. My parents are experiencing this now with my youngest brother, the punk! ;)
What my parents did - and this was great motivation - was give us a set amount of money for every "A" we made on our report cards. We were expected to do chores, and if we didn't do them, you can bet we didn't get thrown any bones. No trips to stay the night with friends. No money. Nada. But every nine weeks, when our grades would come in, it was payday! Ha, I remember the going rate at the beginning was $20 for each "A." The looks on my parents' faces when every class had an "A" beside it on report card day was priceless! :-p I also know parents who put a little money in a piggy bank for their child each week as an "allowance," but the child isn't allowed to use the money without the parents getting it down and counting it out with them. I'd be pretty nervous expecting a 5 year old to keep up with dollar bills!
Wow, I can't believe I actually forgot I used to get money for grades too?!! Maybe that's why our allowances were set @ $1 buck a pop? I think I got $5 per A, and $3 per B but it was wayyyy too long ago to remember. Thanks for bringing back the memories though!
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