The Pro’s and Con’s to Giving Your child an Allowance

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Should you give your child an allowance?

Are you considering giving your child an allowance. There are pro’s and con’s and each side makes a lot of sense! I was on the fence. When I discovered the depth of the lessons that can be taught with an allowance, I became a fan.

Con’s to giving your child an allowance

• It can create a sense of “getting something for nothing.” This is the most vocal argument against allowances. A person should not be paid to be part of a family. This is also a difficult beam to balance on. If you say children get an allowance for doing their household chores, you are paying them for chores, not an allowance, right? This means that if they do not do the chores or do them well, they do not get paid, I assume.

• Parents can get into the habit of using an allowance as a “carrot.” For example, if you get your chores done, you will get your allowance. Or if you are part of the family and engage with your cousins this weekend, and put away your electronics, you will get your allowance.

• Children are always comparing themselves to others. If all you give is an allowance and choose to let your child spend it however they wish, your children will see others who “get” a lot and still are able to have spending money. I see this as a temporary problem, it is simply something that has to have rules and boundaries. Once everyone understands the way allowance works in your house it will work out.

• Unapproved and “reckless” spending

 How big of a control freak are you? I know that sounds awful, but I am one, a big one and I don’t even realize I am doing it! The very definition of allowance means to be permitted. Are you going to allow your child complete discretion over their money? If so, this can lead to purchases you would not approve of and think are unnecessary. However, if you can “let go” your child can also learn a lot.

Pro’s to giving your child an allowance

• It can help teach children the value of money. I like giving your child a little bit more than less, but this is “it.” You do not give them money to go to the movies with friends, buy games, books, etc. You give them a specific amount and the child is responsible for deciding what is “worth” spending money on.

• Children will learn to budget. What if your child gets an allowance of $10 a week? If they only get $40 a month, but want new bike grips, to go the the movies with friends, and upgrade to designer jeans, they are going to have to save money from previous months’ allowances.

• Children learn independence. Your child no longer has to “ask” for everything they want. I cannot tell you how many house wives I have met who have “money stashed” for purchases they simply do not want to ask their husbands for. No one likes to be tied to someone else for everything. Giving your child an allowance gives them some spending money and allows them to decide what is important in their lives and what they value enough to spend money on. Regardless if you approve or like this, in my house this would be video games, servers, etc.

• Your child feels valued. The adults in the family have purchases they need to make and have money for these. Whether they have a job or the job they do is to keep the household running, money must be spent and the adults seem to have “power” because they have access to not only money, but the eventual “yes” or “no”. When you give your child an allowance, you are saying that your child is a valued member of the family and you are trusting them to make their own decisions.

Do you want your children to be responsible for more tidying chores around the house? Not sure which ones they can handle?
I created 10 minute tidying tasks and 10 minute decluttering tips. Read over these to see which ones are appropriate for your kiddos!

What is an allowance?
In your home, you will need to define this. This is the first step towards making the allowance something you can all live with and learn to love or something you are constantly grumbling to yourself about. Do you want it to be a “payment” for chores? Do you want the allowance to represent that your child is a contributing member of a family? Are you okay with your child simply getting money for being? Establish what the allowance is representing. If it is because the child is part of a whole, which I like, talk about what everyone does to keep your household running effectively and peaceably. This way your child understands that everyone plays a part and they know what their part is.

What age should children receive an allowance?
I started receiving an allowance when I was six years old. I got .25 a week. Later, I received double my age per month. I grew up a long time ago-so money went a lot further. However, I remember getting that $1 each month and saving it so when we went to the drugstore I could buy a fun flavored lip gloss or outlandish colored nail polish. I knew exactly what I wanted to spend my money on, but had to save the entire month’s “earnings” so I could get what I wanted.

I learned how to budget and save early. I learned the value of those quarters. I think my parents did a good job with this. They never said I could not get Coca Cola flavored lip gloss or blue nail polish. They simply turned a blind eye to my precious purchases.

How much should I give my child for an allowance?
I have fallen in love with the idea of allowance because of this question and nuances that go along with it. I am in stores, at events, or at places where items are for sale (almost everywhere). I have begun watching family dynamics. Invariable, children are pulling stuff out or pointing and saying “I want.” This is not critical of children, I want a lot too! And if that child sometimes gets a “sure” or “just this time” the child will, of course, keep asking, who wouldn’t?

This causes friction. The children always ask, beg, plead, and eventually whine because sometimes they can wear their parents down. The parents get really upset because they just want to get whatever it is they are doing, done. I don’t find fault with either party; it is just a condition of how we live.

So, what if you gave your child an allowance each month? What if you told them, they are responsible for anything they want other than…(and you make a list). In the list of things I would buy for my boys, I would always include fruit of any kind, not candy or pretty much anything down the “energy bars” or “pop tart” aisles. I would also always buy books. I spent a small fortune on books. I wanted to encourage reading, it was worth it to me.

My mom would buy my sister and I school clothes each year. As I got older, I realized it was really “not cool” at all to wear the cheap jeans she was buying. She and I made a deal. She could get my jeans for $10 a pair. She thought I needed 3 pairs of jeans. If I promised to buy 3 pairs of jeans, she would give me the $30 that I could combine with my money to buy the “in style” clothes. 

So, yes, I absolutely would buy my children clothes, however, I would not get them the $150 sneakers or name brand clothes that cost so much unless as a gift. The children can learn to use their money for these purchases, after all, how badly do they want them?

If you handle allowance this way, all of that friction and wheedling and arguing over “will you buy me this” goes away. You simply say, “You can buy that yourself.”  

Your children will get a sense of goal setting, again, without you having to teach this; it will be a cause and effect type of thing!

When we went on vacations, I always told the boys I would buy them one thing to remember the vacation. This means that if we had a 7 day trip to New York planned and the first place we went was the M & M Factory and a child asked for a sweatshirt, that is fine; I would buy the sweatshirt. When we then visited the Museum of Natural History, two days later, and our child wanted a science kit from the gift lobby, I had already bought their special trip gift. I did not buy one from each place, I bought one, and I did not quibble over price, for the entire trip.  It took one vacation for both boys to learn to use their own allowance for trinkets like an $8 Statue of Liberty and hold out to ask me for the $75 Yankees jersey. 

The best news ever? I never had children bugging me constantly to buy, buy, buy every where we went. I LOVED allowance.

Talking about money
Talking about money is like talking about religion and politics. Many people skirt away from these issues due to being uncomfortable, while others voice their opinions loudly, almost violently.

Either way, attaches specific emotions to money. Whether it is something to be whispered about and almost feel shame towards or whether you should be boastful about-emotions are felt. A child feels this.

How will you talk to your child about money, in general?  How do you feel about money?

This is important to know. Almost all of us have beliefs, deep down, about the correct way money is saved, spent, and spoken about. Should your beliefs be the same as your child’s? Will you let them form their own values?

I am not telling you how you should do this, I am saying, think about it. I have a lot of deep routed shame about money. I do not like to talk about it. This has affected my relationships. I wanted to be conscious of this with my children because I did not want them to carry this shame as well.

If you feel all money should be saved, instead of telling your child they need to have this value as well, tell them why you feel this way. What is your fear? What do you need that money saved for? This may help your child develop their own sense of needing to prepare without an attachment to fear.

Should I get my child a bank account?
You are talking about money, this is great! 
When a child learns to handle finances, even small amounts, they are taking a big step towards independence. If you want to learn other ways to help your child grow in their independence, check out: 5 Ways to Help Your child Become Independent, where I list different ways your child can learn independence and the steps to take at different ages.

One of our biggest jobs as parents is to teach our children. You have a natural teaching opportunity. You have been talking about money, you are now giving them regular “income”, and they may want to “stock up” that money for a large purchase. The perfect place for them to do this is a bank.

There are classes in our area, and I live in a small town, at the community college during the summer that teach children how to basically do personal financing. They teach how to use a debit card, what it means to put something on a monthly subscription, how to keep track of their bank account, how banks charge if a person charges money without money in the account, why a person wants to put money in a savings account, etc.  I would recommend some kind of personal finance “class” or opportunity for your child by the time they are ten – twelve years old.

I would also definitely get them a bank account. You can offer different incentives, like for every $10 each month you put in, I will match you $10. This will start teaching them the advantages of a 401K Matching Contribution Retirement plan, again-without you ever having to talk about it!

It is a digital age, no arguing. There are some fabulous learning apps that help children save and learn how money works. There are so many options that when I started researching, I decided this is a blog all unto itself! Watch for this one next month.

When should I stop giving my child an allowance?
I don’t know that you should stop while they are still in high school. 

This is all going to depend on the “why” you set up the allowance in the first place. If you set it up because the child is a participating member of the family, go until they leave. Whether they leave for a GAP year after high school, college, a trade, or if they move out to work on their own.

If your child stays at home after high school, it gets sticky. Are they still contributing? If they are not, it is a no-brainer, no allowance. If they are paying rent to live at your house and are occupying space like a renter, meaning they are not contributing to the duties around the house, again, no allowance.

Regardless of the action you take, I do believe that as the child ages, you should “raise” their allowance. However, I do not believe you should raise it to cover all of their costs, especially when they turn 14. At this age, they can find “add on” work. They can babysit, mow lawns, watch neighbors’ dogs, etc. If your child has more “wants” than you pay for and their allowance covers, teaching them the value of the dollar and that they need to find a way to get that money themselves is not a bad thing.

As long as you are generous with love, comfort, food, clothing, and shelter, I think it is fine for a child to learn that they need to “help out” with the wants, not the necessaries.

Whether you decide to give your child an allowance or not, finding a way to teach them about money is important. An allowance can give your child experience in budgeting, saving, spending, and valuing the worth of an item. It is not, however, a decision that should be made lightly, take time to outline your feelings about an allowance so this can be a positive experience for the entire family.

“What’s the good of having all that money if you’re never gonna spend it?”

~Walter in Second Hand Lions