Are you tired of your children trying to convince you to open your wallet?
They use pleas like:
“I'm going to the movies, can I have some money?”
“I want that McDonald's toy mommy”
“Will you buy me this sweater? I need it. Honest. I don't have a blue V neck, only a teal crew neck, a grey boat neck, a green polo and a......”
“Can you buy this book for me? You're supposed to support my reading ya know.”
What do our kids think, that money grows on trees? No, that’s crazy!
Every kid knows money comes from ATM machines. When we tell our children we don’t have any money they say, “just go get some more from the machine.”
I am a big believer in teaching children all about money. It’s a huge topic, starting from what each coin looks like and its worth, to more complex ideas like money management, savings, charitable giving, building credit, taking and replaying loans, the value of purchases and so on.
Money skills are part of life skills. Teaching these skills is a part of responsible parenting. We have to prepare our children for life outside the family nest. Hopefully they’ll have had a chance to build those skills before getting that first student loan. A good first step is to set your child up with an allowance.
Parents often like the “idea” of allowance but don’t know how to go about it. Here are the three most popular questions and their answers so you can get going:
• When should children get allowance?
• How much should they get?
• Should it be tied to chores?
As soon you become tired of listening to the weekly tantrum at the grocery store because you refuse to buy them a chocolate bar at the check out counter.
One solution is to say "It looks to me like you would like to start buying things for yourself. Would you like to have your own money to do that?" Now you have started an allowance! A small allowance to be sure, but an allowance none the less. The first things your child will need to learn are the simple money lessons:
Learning to remember to bring your money along - "Yes, I see you want a chocolate bar. Do you have your money with you? Oh, that's too bad, next time!"
Learning about giving money to the cashier and getting change back with a receipt.
Learning money denominations: Four quarters is the same as one dollar. We call dollars “loonies”. Two dimes and a nickel is NOT more than one quarter, even if you have three coins instead of one.
Learning money is finite: If you leave the money in your pocket it gets lost in the laundry and now it is gone (don't even THINKING about replacing this parents!!! what DO you want them to learn about money anyway?)
Learning how expensive things are - "that costs 6 allowances, this one only costs 3 allowances"
Learning what's worth buying - "I wish I had not bought that McDonald toy. I only played with it once. Or saying "Yes! you can have that, you can buy it with your allowance" only to hear back "Nay, never mind then. Not if I have to pay for it. Its not worth it."
2. How Much Allowance?
I think the old adage "one dollar for every year" is totally random and silly. How much you give your child should be based on a budget and that means it takes into consideration your family’s socio-economic abilities and which purchases your child is taking responsibility for.
You should not be "out of pocket" putting your child on an allowance. Think of it as transferring responsibility. As they get better with managing money you can give them progressively more budgeted items to manage and oversee.
If you have been purchasing the gifts they take to their friend’s birthday parties, they may be ready for you to hand that responsibility on to them. If they assume the job of buying gifts, then their allowance goes up accordingly.
If they are managing that added responsibility well, it might be time for them to start buying their own clothes. If so, you will need to add money to their allowance budget too. If their clothing taste is expensive, they can supplement their clothing budget with babysitting money or a part time job. Parents are only required to cover basic needs, not designer trends.
3. Should Allowance Be Tied To Chores?
Okay, that was a bit too brief of a reply. Here is my rationale: I believe children should get money just the same as they should get all their basic needs of food, clothing and shelter. Let’s face it, these are modern times. We are not a hunter – gatherer society anymore. Exchanging goods and services for money is how our economy functions now. Money is a modern requirement, not a luxury. Now, you don’t have to give them caviar and a Lexus, but milk money for school, and enough to participate in the monthly Scholastic book offer seems reasonable.
The same goes for chores. We all need to do chores because as a family member everyone is expected to pitch in and help with the running of the household. It’s the give and take of family life. Chores also help our children learn how to be competent at a variety of life skills like laundry and cooking. If you don’t want them living in the basement until they are 40 years old, I suggest you teach them skills for living (and leaving!)
When you start putting a dollar figure on chores you are inviting a troubling mindset to form known as a "what's in it for me" instead of a "we" mindset.
"If I get a dollar for taking out the garbage then what are you gonna pay me for clearing off the table? Or for hanging up my coat?"
That is a petty and sad mentality to be nurturing in our children. We want them to learn that they do these tasks simply because it needs to be done. Its not related to money at ALL.
If you pay for chores you’ll be screwed when Junior gets a job at the mall or starts babysitting and they don't want to help around the house anymore because they don’t need those two dollars you were giving them for making their bed each week.
Too often parents use the child's allowance to manipulate and control them. They threaten to dock their allowance if they misbehave in some way, or reward them with money if the are a “good girl” all day. That’s a no-no.
Giving children allowance is part of the empowerment process that helps them develop themselves and their competencies. Allowance is one more building block that will help you construct a harmonious democratic family.