Question: Should we give our kids an allowance?
Allowance is always a tricky issue. It is fraught with strong opinions. Lucky for me, I'm writing this, so I get to give you my opinion. Take it or leave it. Through my lecturing, I've learned approximately 90% of parents give an allowance in some form. I think giving an allowance to young children is the best way to teach the practice of tithing and money management. The lessons they learn will be invaluable to them.
It's important to have our children gain experience with money in a safe environment. They can practice budgeting, spending, saving, and investing all in the safety of childhood and the family home before facing the real world as an adult.
Since few 5 year olds have their own source of income, parents need to provide money through an allowance.
Pay for Chores?
The big issue with allowance is whether to have it be linked to completing chores or not. There are different arguments for both sides of the issue. In our family, we do not tie chores and allowance. It only takes one time for your child to look up and say, "Keep the allowance. I don't want to work," and you will learn this system doesn't work well.
Chores are things we do because we're part of a family. No one pays Mom for cooking. Nobody pays Dad for weeding. There are things we do because our family does the work that needs to be done for our home and family. Paying them for everything will give them a warped sense of reality. Frankly, we do lots of things for which no one pays us. The earlier they can learn that, the better.
With that said, some of you on the other side of that argument say, "Yes, but we get paid for our jobs." Many parents want to teach that message to their children. We solve that as follows: There are regular chores required of every member of the family for which they don't get paid (or any privileges or anything). There are also what we call "Money Chores" that they can do to earn money.
Money Chores are larger chores requiring more effort, such as defrosting and cleaning out the freezer, large yard projects, washing and detailing the car. They provide great opportunities to earn money while learning those larger, and often rather unappealing, work activities that are good for them to learn.
Since they are getting paid, we have fairly high standards of excellence for these chores. The minute you let a lousy performance slide by, you're dead in the water. The rule is, the money chores must be checked and approved by a parent before they are paid. We talk a lot about what a real job is like and how they don't pay you in advance.
Money Chores can also be done to earn privileges rather than money. Nothing is quite so wonderful as having your teen son offer to wash and vacuum the car so he can go to the beach with his friends. Yahoo! This can be a great boon to busy parents.
I needed to change the shelf paper in my pantry and kitchen. I offered a per-shelf payment. Over the past 3 months, it's gradually been done by the boys. How lovely is that? So much better than merely shelling out five bucks here and there when they whine and beg. When they want money, we just say, "Go look at the list of money chores and do one." They value that money so much more than if the Daddy ATM had just spit out a wad of bills.
It can also curb their spending. If they know that going to the movie will cost them an hour of work, they look at it far differently.
Having an allowance is an important experience for a young person. They need to learn to manage money. We can provide that learning opportunity for them with an allowance. Start now. Take the time to teach your children how to manage their money. Their spouse and kids will thank you one day.