April - May: Allowances

Do you give your kids an allowance?

A few years ago, when my children were 7 and 9, my husband and I decided we were going to start giving them each a weekly allowance. We decided we’d assign them chores for the week and if they were done to our satisfaction, they would get their allowances on Sunday nights. My son who was 7 had to do things like bring in the empty trash cans, keep the shoes organized by the garage door, clean his room, and feed the dog each day. My daughter had to do things like emptying the dishwasher, sorting the socks in the laundry, clean her room, and feed the cat each day. We were oh so proud of our parenting skills with this brilliant idea to teach our children responsibility and money management. We had arbitrarily decided that my daughter would get $5/week and my son $3/week (absolutely no reasoning or calculation behind those amounts). It lasted six months, if I’m being generous to myself.

After reading many of the articles I’ve linked below, I can’t believe how foolish my husband and I were! Remember, we have education degrees – and graduate degrees - but, there’s no parenting degree out there and it’s a whole different ball game! Many of the articles and research I’ve read says that parents should NOT tie allowances to chores. I had never thought of all the pitfalls of doing it that way but it makes a lot of sense. Also, there are many decisions we need to make and ground rules we need to set. Will the kids be using allowance to purchase things like birthday gifts for friends, their own clothes, movie tickets, etc.? Even though it is their money, do they still have to get their purchases approved by us? If they have an item that they bought with their money, are they allowed to take it wherever they want (e.g. I don’ t let my son take his DS on the bus but, if he bought it with his own money, should he be allowed to take it wherever he wants?)? Can we designate how much of their money is to be saved, spent, donated? Should we set up a bank account for them? Are they allowed to lend money to each other or a friend? Wow, we really didn’t think through any of this before we tried establishing an allowance system. One of the best pieces of advice I’ve read is to have your child keep a log of their money and their spending. I imagine it is very powerful to reflect on that log over time with your child.

The goal of all this is, of course, to begin teaching our children some financial responsibility and financial values. I believe I will be sharing the articles I’ve read with my husband this spring so that we can work together over the summer to develop a healthy, valuable plan for our children’s allowances.
Please read the articles I’ve linked below and post your comments, ideas, and your own experiences!

http://articles.moneycentral.msn.com/CollegeAndFamily/RaiseKids/ShouldYourKidsGetAnAllowance.aspx?page=all
http://www.kidsmoney.org/allart.htm#AmyN
http://www.kidsmoney.org/allart.htm#YM
http://www.activeallowance.com/kidsallowance/how-it-works.html
(an online program for your family and your kids will have their own accounts)
http://www2.scholastic.com/browse/article.jsp?id=3746974
http://www.moneyinstructor.com/art/allowances.asp