Your kids will tell you nothing in life is free. Not the movies, not an after school smoothie and especially not those gaming systems that cost as much as a mortgage payment. Yep. Kids want parents to show them the money. But how to dole out the dollars to your children, no matter what the age, can be a dilemma. If you subscribe to the theory of a weekly allowance, what’s the appropriate age to start giving allowance and how much? How often and for what (or for nothing at all)? Suze Orman doesn’t believe in just forking over money to offspring; instead, they need to work for it and are paid dependent on the job. And, like any job, you can't start off at the top tier, either.
So, we’re asking you to weigh in on the whole allowance issue.
Q. To give or not to give (and how much), that is the question.
My husband and I are the absolute worst parents when it comes to doling out allowance. How so? We’re inconsistent. Friday rolls around and we forget to give our kids their promised stash of greenbacks. Our 13-year-old son complains we underpay him at $5 a week. Underpay him? I wonder for what exactly? For begging him to feed the dog, keep his room tidy, and do a few hours of weeding that may or may not get done? Our eight-year-old daughter receives $2 a week, but she, too, doesn’t really earn it. She doesn’t really need it either considering her social life is rather minimal. And, while I admit five bucks doesn’t go very far these days, I also worry our son doesn’t really have an appreciation for money. As fast as he gets it (be it cash or in the form of a gift card) it vanishes. In its place is a bunch of useless stuff including empty bags from Powells. We’ve tried to instill the importance of saving something for a rainy day. And, without question, a week doesn’t go by that we don’t hear the words, “Can you buy me (fill in the blank). We discussed switching to the Suze Orman method of earning money, and I think we may go that route. A colleague of my husband’s has an innovative way of providing for his high school age children: He gives them a lump sum of money at the beginning of the year which covers clothes, gas money, entertainment and anything else. He empowers them with the decision making and they, in turn, must learn how to balance their money. I may give this a go in a few years so get the things he needs and wants. After all, he’s the ONLY kid at Rogers without an iPad, laptop computer and annual pass to Disneyland. I had no idea…
I wish we could say we were perfect parents. What can I say? We do our best. My son's compensation package is a combination of earned and given. Earned, because he teams up with his friends for a twice annual garage sale. He recycles household cans and bottles for spare change. With his friends, he has a pseudo-company, Awesome Industries. When they're in production mode, they sell duct tape wallets and bracelets. A dollar or two is the going rate for household chores in our house, but we don't have a fixed schedule, and can go months without him performing chores for wages. His distant relatives will often give cash and checks for his birthday and sometimes for Christmas. He puts most of these in the bank, but will keep some for his wallet. No allowance is given, but we periodically will give him leftover dollars from a shopping trip or buy him something that he wants. Yes, we do spontaneous trips to Best Buy, Target, Barnes and Noble and Gamestop. Sometimes we come away with something for him at our expense. Sometimes it's at his expense. It did seem that we bought an awful lot of wako erasers for him because they were cool! We pay for movies and eating out. There are a few things we will always buy for him. Books, graphic novels (Dad’s a comic book nut), stuff that looks as if it’ll be good for him. He really wanted that Scrabble set since his class was doing a Scrabble competition. Of course we bought it for him!
Well, I'm probably going to be a contrarian here, but I never got into the whole allowance thing. (My mom didn't either, so maybe that's why.) I can't really see the point of giving kids "free" money. Standard wisdom says you are not supposed to pay kids for things they are expected to do, so an allowance is for being part of the family, or something like that. If it is supposed to be about teaching them the value of money, I don't really see why giving them money each week teaches them anything. Personally, I tried to model good spending/saving habits and explain to my daughter why we were making certain choices. (If you ever see her, please don't ask her about how we used frequent flyer miles to make an 11 hour trip a 24 hour trip. She'll never forgive me for that one!) Additionally, I could not imagine myself remembering to get cash each week or remembering to deposit money into a bank account. Can't wait to hear how everyone else handles this!
Here is what I have found to be the best solution for paying allowance to my children. I did start out paying allowances per job. That became way too tiresome and having to constantly dole out money. What seems to be best for me is to have a set schedule of a couple of items to be done each day i.e.: take out the trash, make your bed, put away the dishes, clean room- you get the idea- simple jobs that each day could be done in less than 10 minutes (that would not include the grumping that sometimes occurs). At the end of each week (keep in mind they get Sunday off), I ask them if they did their chores (I try hard not to follow up with them each day because that gets to be a drag) and if they did all their chores throughout the week, they get $5.00. If they did not do their chores on one day, they get $1.00 less. I started this some time ago so they could each earn $100 for a trip we have coming up. They have since earned their $100 for the trip and here on out is money for them to buy whatever they want. I think this has helped them understand what it takes to earn money, save money and become responsible. They do not ask me for money all the time and if they do, I tell them they need to save their money to buy what ever the item is themselves.