December 14, 2018

Kids in the Canyon: Allowing Allowance

 

There comes a time when every parent entertains the idea of their child receiving an allowance, or pocket money. There is even a game devoted to teaching the concept of allowance: “The Allowance Game” allows players ages five and up to learn about earning money, maintaining responsibilities such as homework, and how to spend money responsibly.

Giving your child an allowance is a topic that appears suddenly in the middle elementary years or when a child’s best friend begins receiving one. By thinking about how you want to handle allowance ahead of time, you will be prepared when the topic comes up. You might even bring up the subject yourself.

CONTRIBUTING WITH CHORES VS. PAYING FOR JOBS

There is a difference between contributing to the family and earning allowance for specific jobs. Part of being a family member is to help out with things around the house including taking care of toys, cleaning up your room and helping out with siblings.

These are expected because, as a family, we all care for each other and the home we share. To earn allowance, children can take on extra jobs such as taking out the trash, cleaning up after pets, doing laundry or bringing in and putting groceries away. Every family has different needs and will want to select the chores and jobs in a way that makes sense for them, but having a clear distinction between chores that are expected and jobs for which you are willing to pay an allowance can avoid future misunderstandings.

EXPECTED VS. EARNED

When I was growing up, allowance meant money one’s parents gave us each week to spend on whatever we wanted. This doling out of money, with no expectations, led to a generation of kids growing up feeling entitled to money without linked responsibilities. Giving a child a small allowance allows the child to feel like they have a little money to buy small items for fun, or to save up for something special.

Earning money, for completing extra jobs, whether at home or jobs for neighbors, allows children to learn how to set up a savings program with short and long-term savings goals. One way to teach savings is to divide earned money into thirds: spending, short-term savings (at home) and long-term savings (in a bank account).

AMOUNT OF ALLOWANCE AND FINANCIAL RESPONSIBILITY

Parents often try to figure out how much allowance is appropriate and this is something that is decided within each family. There are a couple of ways to determine allowance such as 50 cents to $1 a week per years old, e.g., $2.50 to $5 for a five-year-old; or a set amount that seems reasonable, e.g., $3 per week.

Extra jobs can have a payment attached such as $5 for mowing the lawn, or $3 an hour for babysitting (depending on the age of the babysitter).

The point is to pay enough so that the child feels acknowledged and respected, but not a ridiculous amount that will give the child an unrealistic expectation of their own worth. If you give a child $20 to help you rake some leaves for an hour, that will become the new norm and depending on your budget, you might regret that decision.

Keep the payments reasonable and up for negotiation if your child feels she is deserving of a raise and not just because a friend earns more. Learning to negotiate a raise is a valuable skill involving a persuasive speech with evidence to back it up.

Be willing to listen to your child and come to a decision together.

WHAT DOES ALLOWANCE COVER?

Allowance should cover different expenses at different ages. For a young child, 5 to 7, the allowance is basically fun-money for little extra things such as collecting cards. For a child in middle-school, allowance can be used to buy food above and beyond what you are willing to pay for, such as after-school treats.

Allowance can be used for entertainment, such as going to the movies or eating out at the mall with friends.

For high school teens, allowance might cover the gas needed to get to and from school, with the child responsible for paying for gas used for extra driving. Be clear about the expectations so you don’t have to negotiate every item. It might be helpful to have a one-page agreement that is signed by both parents and child to keep intentions clear.

Allowance is a great tool for teaching children about financial responsibility and for giving a child a sense of financial freedom. Learning to be financially responsible under the guidance of parents can give the child the skills needed to go off to college and then out into the adult world. ­

For questions or comments, please send e-mail at amweisberg@completeteach.com, with “Ask Amy” in the subject line. I would love both feedback and questions.