Wednesday, June 16, 2010

An Allowance Please?

My son Noah, randomly wanted to buy a toy car. When I told him that mommy didn't have the money right now, he then said he wanted to ''buy'' money. This had my hamster start running in his wheel, in other words, it got me thinking about the importance of teaching my kids a few lessons concerning money early on. While discussing this with my husband, we decided it was time to give our kids an allowance. Problem: We quickly realised that we have two different view points when it comes to what conditions should be considered in giving the said allowance. We could decide to give a fixed amount weekly so that the kids learn how to manage a steady ''income'', or, we could give them  ''compensation'' for the completion of chores or given tasks. Neither of us was convinced that our perspective was the correct one to have. What was the lesson we wanted to teach our millionaires-in-the making?

Money Management: Kids will learn about money skills if they have it. No money, so skills. The goal behind offering a weekly fixed amount, is to begin teaching your kids the basics of money management, like saving for a specific desired item, delaying immediate gratification, and knowing how much they can spend now. They can better  budget just like you and me, knowing generally when and how much money is expected (without worry that they won't get the predicted amount if their beds aren't made).  For these reasons, money should not be tied to chores. The lesson in giving an allowance is not about earning money, or that money isn't free, it's about money management.

But, Money isn't Free:
I get a paycheck to accomplish some work. I don't do the work, I don't get the money. Sure I'd prefer taking some days off watching soap operas, or going shopping, but I need the money (to go shopping), and so I have to be responsible and do the work that's expected of me. ''Do your chores, you'll get money; don't do them, no money!'' Thus, an allowance can be a great way to teach your kids about responsibility, the value of money, and that money isn't free.

 What did we decide? We agreed that it was up to us to teach our kids how to manage their finances. Too many young adults find themselves way over their heads in debt. We also want to teach our kids about hard work and responsibility. Contribution to household chores is a responsibility that is to be expected regardless of an allowance, in proportion to the children's age and capacity. No one pays me to do the laundry (when I actually do it, Thanks honey!)... It is their home as well after all. We've decided to give the kids an allowance, no strings attached. We're also not going to encourage loans outside their allowances. The kids have their chores, and should they want a bonus, so to speak, they have to do something above and beyond, like clean the car for example. 

My kids will know where money comes from, that it runs out, and that hard work pays! Problem solved!

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Anonymous said...

Never thought of it that way.... always attached an allowance to housework. You make a good point. :-)

Jessica said...

I think you're right about not tying allowance to doing chores – I don't think parents should have to incentivise everything.

We tend to underestimate how much kids are capable of. At daycare and school, they know they have to pick up their toys, and they do it.

In my son's kindergarten class, the kids all have jobs, like watering the plants, sweeping the floor, cleaning the desks, etc. At this age, most of them are proud to have that responsibility.

At home, we are less consistent about enforcing clean up/chores, because it's often easier to do the job ourselves.

Great blog topic :-)

Anonymous said...

is this allowance for all of your children or only for the one actually capable of counting and able to compare prices? Because, if a child wants to buy money, he definetely has no idea what money is, besides the fact that money is needed to buy a toy. Maybe, the important thing here would be to find out at what age an allowance would be appropriate...