Thread: "Allowance" for kids?

So for those of you have kids or have been a kid, I have a question. Do you think kids should get an "allowance" for just being a kid? Do you require your kid(s) to do a set of chores in exchange for their $$? How much? What is reasonable? If you (like we do) travel a LOT for business, how much should you leave them for food? How much is reasonable to spend on their clothing per month or year? I know there are a lot of questions/ variables here. But I want to know what other folks consider reasonable.

My folks gave us a meager allowance ($0.50/wk as kids; $5/wk as teenagers) to spend as we wished. Anything more an that we had to work for. Granted, this was 30ish years ago. But I'm just trying to figure out what is "normal"?

I ask myself that often. I believe how much and how should be in phases. We started our children's allowance with a simple $1 per week. The amount is not important at first. There job was to focus and keep it safe and not leave it on the couch, floor or other places (tough task). After a year they got $2 per week and kept account every couple of months. They are young yet, so they are not consumers that can go shopping on there own. But soon we are adding more money and introducing expense management and tithing. After that we'll start asking them to think, how can they make more. My goal is to help them off an allowance and start a business before they're 18.

I guess its what your trying to teach your kids and how they relate to money.

if they get it handed to them, do the develop an expectation of money?
if they are given the toys or item itself, does that break the link to the value of money?

if you give the too much, and they have excess spending money, do they learn to save it? or do they learn to spend till its gone?

I have spent years understanding my relationship with money, and changing it. It used to be limited, unavailable and hard to come by. changing how I see it, its availability, and understanding it has helped me alot to grow as a person, and business.


this question is particularly interesting to me because I believe that it sets the foundation for how a child and eventually an adult views money.

I have a 3 yr old and its going to be a question at some point soon.

over the past 20 yrs, of having employees, I have seen all sorts of limiting beliefs, around money, and some lead back to how the parents interacted with kids in regards to money.

whats the right answer? I am not sure, but when my daughter is old enough I know I will show her some of the secrets of creating money out of thin air, but the idea and beliefs around money often set long before that.

I think an allowance may allow them to buy things they would like, but it needs to be tempered with a understanding that buying is just one step in a process of money creation, use, and disposal

how? well I'm certainly open to suggestions.

Well, I know what I believe. But since this is a "blended family" situation, I don't really have much of a say. I certainly don't have the final say. I would just like to know what others think/do.

Allowances should be at fair market wages. For example, compensation for the real cost of mowing a lawn or cleaning a house by taking a real market wage.

This is the best way to be fair. Also, if your kid doesn't do their job, they should understand and be treated like any employee and not receive compensation.

Otherwise you are subsidizing an activity that is not currently being compensated and probably not instilling the lessons you want to be taught.

Even in America, close to 15% of people are on food stamps. I think understanding this is key to bringing up a child who understands the world.

Originally Posted by pro

Allowances should be at fair market wages. For example, compensation for the real cost of mowing a lawn or cleaning a house by taking a real market wage.

This is the best way to be fair. Also, if your kid doesn't do their job, they should understand and be treated like any employee and not receive compensation.

Otherwise you are subsidizing an activity that is not currently being compensated and probably not instilling the lessons you want to be taught.
.

but working for money, in this format, often instills a "prostitute your time for money" mentality.
treating my kid like an employee, will never instill the "create value" lesson.

I think I would have to disagree with that.

Never liked the idea of an allowance as payment for chores as it creates an employee/employer type of relationship which I don't think is healthy in a family. This type of conditioning creates kids that become very dependent on employers for money. I think kids grow up as much more independent and stronger adults if they don't have the association that: parents = source of money.

I think participating in common chores should be done just because a kid is part of the team (ie family) and as a result of being part of the team basic needs are taken care of.

Entrepreneurial activities done outside the home would then be taught to earn extra discretionary money. Personally I had a paper route starting when I was about 11.

I have a bit of a different take on "allowance". I have a 4 year old daughter and it isn't an issue yet, but I'd like to approach it differently. I never remember getting an allowance and if I did it was very inconsistant since my parents were terrible with money (and still are) and were usually broke or behind.

What I would like to do when my daughter is old enough to grasp the concept is give her a lot of money as an allowance. The exact amount will depend on her age and her need for money. The caveat is that she will be responsible for making her own decisions as to what that money will go to. If she wants to play sports then she will have to budget for the equipment and the physical. If she chooses to spend her money on mall hopping with her friends and doesn't have enough left over for what she wants then she will learn quickly about the concept of priorities. I feel that this approach will give her money management skills at an early age that will benefit her for life instead of just throwing her to the wolves as a young adult like my parents did to me. Her mom and I will provide all the essentials, but the extra things will be up to her. Now, if she develops bad habits such as blowing her money on junk and skipping the good stuff then we'll have to either coach her heavily or re-evaluate the plan. Either way, the money will be spent to cover those expenses so why not give her the opportunity to manage it?

We have two teenage boys. Their allowance is nominally $10 per week, with the expectation they do some simple chores around the house. We have a rotating chore list posted on the fridge. They don't do the chores, they don't get the allowance.

I got tired of nagging them so I offered them a "raise:" 50% bonus if you do the chores ON TIME, WITHOUT NAGGING. That's helped some, but they still tend to "forget" or to claim they did the chores when I know damn well they didn't.

So I instituted a new rule: it is THEIR responsibility to read the %@#% chore chart (you would think 14/16 yr olds could handle that) and figure out what they're supposed to do. When they do their chores on the weekend, they must come to me and show me they've done them. If they don't show me, it didn't happen.

I'm not thrilled by the "prostitute yourself for money" concept this teaches, but I'm still trying to get these two to accept some basic responsibility...

Interesting thread.

While there's probably no ideal solution, I generally think y'all need to give some break to the kids.

Just remember you were a kid too.

What I believe in:

>> There should be some guaranteed minimum allowance, whatever's enough for your kid to eat
at school or cover some other minor expense, so that (s)he doesn't become a social outcast, or even go into
bad company. Kids are 100% people just like us, and have their pride, reputation, needs, social life.

And hell yeah they earn this minimal allowance by just going to school, and getting by with whatever
grades. They still have to go there every morning, so it is their work, and it is your obligation as parent
to pay for that work.

Also, if there's ever a school-trip which is optional, that should be the last place you cut corners on.
If you have a kid, you better starve for a few days, than to take away from them such precious moments
while distanting them from the rest of the class.

>> As for educating them about money and responsibility, I'd maybe go the "limitless possibilites" route
(just made up the term now). Which means, I'd let kids dream and express material wishes, and then
together with them determine achievements which will bring this. Achievements could be good grades,
good behavior and whatever - and need to be precisely defined and dated. Rewards should be whatever
is agreed - electric guitar, a trip, cash money.

I even plan to make long term challenges too - if certain level of discipline, good behavior and good grades
is maintained throughout entire high school - a CAR at 18 will follow up - and depending on quality of the
results, it will vary from some junk car to fancy new SUV - this is also a part of why I wanna be rich - to be able
to give my kids what I didn't have.

IMPORTANT NOTE: Don't make promises to kids that you are not able to follow through. Don't think they'll
settle for less - they know exactly what you promised, and if they do their part, go starve but do your part.

>> Business education: I think it's very important not to underestimate kids one bit. They learn faster and are not scared and scarred from life as all of us grownups are to an extent. So their mind and imagination runs totally free, and sees no limits you do. Your skill of setting up a wordpress site is a joke to what you kid might be able to do.

When I was a kid there was no internet, but the entrepreneurial spirit was in me, I'd buy/sell comic books, old stuff, whatnot.

If your kid has these ambitions, maybe it's cool to support them - books and other educational stuff should be a free treat for your kid. Courses of improvement in anything, any trainings, sports - I believe that should be available.

>> Yes there definitely should be restrictions and penalties, but I think the system can only work if there's both penalty and reward. It's easiest to say "you're grounded mister!". But make sure that if there are some awesome results, you're able to say "pack your bags, we go skiing mister!"


Ok, that was my inner kid representing for the other side

Kids need discipline and proper raising, and despite how all the above sounds I believe I'll be a very harsh parent. So I'm not for spoiling them, I'm just saying...

Childhood is a precious diamond, and we all can have just one, so just don't overdo the "working for money" thing, let this diamond shine in their hearts forever, and let them feel blessed to have you as a parent, just as you were blessed to have them.

And don't give them monthly allowance at once, they're kids, are you crazy?

If I had monthly allowance I'm sure I'd starve at school, but would have the latest playstation
And also this can lead to showing off and getting in trouble, or getting false "friends" and going
totally wrong path. Too much of anything can be harmful, and that goes for allowance too.

Originally Posted by garyfritz

So I instituted a new rule: it is THEIR responsibility to read the %@#% chore chart (you would think 14/16 yr olds could handle that)

OMG I Laughed out loud at this one!!!

IMPORTANT NOTE: Don't make promises to kids that you are not able to follow through. Don't think they'll
settle for less - they know exactly what you promised, and if they do their part, go starve but do your part.

Thats an awesome observation!

I have read a few books on this subject, as I believe it's incredibly important in shaping a child's view towards money (and now have a baby on the way with my wife).

None of them are perfect, but the best book I read was "Raising Financially Fit Kids".

My plan is to pay for all my child's necessities/education/extracurriculures. His allowance will be purely for "extra" things like a skateboard or whatever (which I still have the final say on - just because it's "his money" doesn't mean he has the only say on what it goes towards), and will not be based on chores. However, he will have the opportunity to make more money by identifying and working on other things, outside of his expected chores.

Give your kids enough to do something great - but not enough to do nothing at all.

Young Kids 5 -10 - Give them whatever is fair, but teach them to budget and buy the fun things you'd ordinarily buy for them - stops begging for this or that and teaches what it feels like to be broke.

Older Kids 11 - 14 - Give them something more important than just the money to buy ALL their clothes and other junk - show them how they can post local ads and earn MORE money babysitting and cutting lawns, shovelling snow, etc. Promise to MATCH what they can earn on their own to increase their incentive to overcome laziness and shyness and force them to build confidence and learn the rush of earning money.
Any money you MATCH for them should be given by cheque so that they MUST open a bank account.
Teach them to have a savings acct into which 25% of their income goes and does not get touched.

Teens - Now they have the references and experience to look for a job.

Before we had kids I saw something on a Rich dad video (I think) which said he would teach a kid this way. They get an allowance and it would be split into 3 piles. One for spending, one for saving, and one toward an investment. I always liked that train of thought and planned on using it with my son, but life is funny and it turned out my son is autistic and although he is high function I'm not sure how happy he would be with this break down of money. Even though I will still try to teach him it. I think we are going to make a list of chores and assign a dollar amount to them. So if he clears his dished after each meal he will earn .35 cents each time or 1.05 a day just for that and so on. We need to make it a list of things we know he can do and things he is still working on like tying his shoelace so the chores might be a little different for us. Our son is 8 yrs old by the way