Financial Responsibility
Allowances
Experts disagree about giving children allowances.
Proponents believe allowances are a good teaching tool for learning about money. Some experts believe parents shouldn’t pay money for the performance of household chores --that children should be expected to help around the house as contributing family members.
You’ll make your own choice about this issue. You can also evaluate the tasks to be done at home and decide which should be done without pay and which can be tied to an allowance. As children get older, this may be easier to determine. If you would pay someone else to mow the grass, why not keep the money in the family?
Whatever your decision, keep in mind your long-term parenting goals and family values. It’s important for your choice to respect your child and give her confidence in her ability to manage money.
Here are some links to help you decide where you stand on allowances:
Once you’ve taken a stand and determined what you’re willing to pay an allowance for, it’s time to decide how much to pay. Use a combination of your values, family income, and discussions with your parenting partner to make this decision.
One approach is to pay $.50 (or the amount you choose) per year of age. A week is a good timeframe for a child. Paying daily can be challenging and hard to keep up. Paying monthly may cause the child to lose motivation. If you pay $.50 per year of age, your 5 year old will make $2.50 per week, and your 7 year old, $3.50.
Anticipate some objections and inquiries from your finance students. “But Mom, Rachel gets five dollars per week!” Use this as a teaching opportunity. Let your child know parents have different ideas and values regarding allowances, and that’s okay. Explain your reasoning, but don’t change your son’s allowance to meet Rachel’s (you can see how that could snowball).
What about a raise?
Don’t cringe when they ask. Envision them as deserving, hard-working adults who occasionally may need to broach the topic with their bosses. Keep in mind that allowances are teaching tools -- your kids are learning negotiation skills. Use a family meeting, or think about it and get back to your kids. Let them know when they can have a raise. If you choose to raise their allowances, be clear about your expectations for how the money will be spent.
