Monday, March 28, 2011

Allowance

This is really one of those things I'd like to get straightened out, but instead we've been all hurky-jerky about it.  We like the idea of giving our kids money so that they can learn how to manage it.  You know, so they long for that special something but experience the heartache of realizing they shouldn't have bought those crap-toys in the dollar section at Target because if they hadn't, maybe they would have enough.  Yep.  We want them to feel that heartache goooood.

It's been our (inconsistent) practice to give Sam $2 a week.  One dollar is his to spend and the other dollar gets divided in two, fifty cents going to church and fifty cents going to savings.  Birthdays and Christmas give his earnings a boost and happen to fall close together. 

Here are our dilemmas...

1) We routinely forget to give the allowance because a) we're forgetful and b) we don't always have cash on hand (unless we've just sold some eggs).

2) We like the idea of letting him/them (we need to start including Sadie in this) learn to manage their money, but it is oh, so stinkin' hard to watch.

I can't tell you how much I struggle when he's finally saved up a few dollars (or has gifted money) and he buys something just for the sake of buying it when we know he's just buying it for the sake of buying it!  Does this drive anyone else crazy?!

I mean, sure, he'll learn a lesson...maybe.  Sure, he'll remember how it fell apart two days later and make a smarter choice next time...NOT.  So, what do you do?  Seriously.  I want to know what you all do.  Do you face the other direction and let them spend willy-nilly?  Do you have some sort of allowance mechanism that gives you some control and more of an ability to guide their spending?  How much do you pay for what ages?  Is the allowance tied to chores or independent of them?

Please.  We could really use some ideas here.  Part II may come along after we've mulled things over and decided on a plan of action.  I'm thinking you all are going to play a major role in this.  Don't tell Sam. Pin It

27 comments:

  1. My personal opinion: don't do allowances. For the most part, they'll learn how to manage their money by watching you. And they'll grasp it far better when they are old enough to get a job and actually make a more significant amount. At that point some guidance might be necessary but I wouldn't push it too early on.

    But that's just my thoughts :)

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  2. Hey there! We do the allowance thing, for the same reason - to let them learn to manage money, etc. My son (8yo) get $3 a week, and my daughter (5yo) gets $1.50. Allowance will go up by 50 cents every birthday until . . . not sure.

    I picked the amounts because I want them to actually be able to save for something they want in a reasonable time frame. The things my son wants are usually over $20, so 7+ weeks of saving seems like a long enough time that it's not "forever," but short enough that he can still keep the goal in mind. For my daughter, she doesn't even think about saving up yet, so no biggie.

    The allowance is separate from chores - it is simiply to teach financial responsibility. They also have chores they are responsible for, which we rather haphazardly enforce. For my son, and now a bit for my daughter, too, once they have completed the standard chores, they are eligible to do further work to earn a bit more money. The chores they are expected to do as part of the family will increase as they get older, but they will also be able to earn more for bigger chores. That's the plan, at any rate.

    We forget allowances frequently, and I have told my children that they are also responsible for remembering. If they forget, too, oh well. If they remind me within the week, they can have it. If they don't remember until the next allowance day (saturday), then it is gone for good.

    Oh, and my kids do frequently spend for the sake of spending, but my son is getting better about saving, especially if I remind him of what he said he wanted to save for. It's a slow process.

    Sorry to have written a book, but I have given this a bit of thought, and you *did* ask! :0)

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  3. We're kinda hurkey-jerky with allowance, too. One thing we are consistent about is that Nat. has to put half of any money he gets in the bank. That gives us a little piece of mind.

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  4. Oh, and one more point I forgot to include in my other comment (and again, you *did* ask!) - I do not attach allowance to chores because I see chores as something that kids should do simply because they are part of the family and they live in the house and should help take care of things. It's a philosphical point with me. I don't want to raise kids who think they should only help out if there's something in it for them. (Beyond living in a nice house with nice clothes and good food to eat, ya know, because that just isn't a sufficient reason in my children's minds sometimes!)

    Okay. Done. :0)

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  5. Here is what we do.....not a perfect system but seems to be working at the moment....We don't pay the kids for chores, they do those because they enjoy eating at our table and having clean clothes to wear...:-). We pay the kids on the first of every month, one dollar for each year (ie. the 8 year old gets 8 dollars). They can choose to spend it however they like with one exception, they have to tell me what they are going to buy BEFORE we go into the store. Just like I try to just buy what is on my list. Hopefully this helps with the "see it and have to have it right now" problem. I have a couple kids that never spend their $$ and have a nice chunk just sitting in their drawer and others who spend it as soon as they get it. Hope this helps....:-)

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  6. We've always given our kids an allowance. Now that our kids are teenagers... they each get $60 a month... With that $60 they have to buy all their clothing, shoes, school supplies, birthday/Christmas presents for friends, toys, video games, CANDY, movie tickets... you name it.

    I pass out allowance on the last day of the month. If my kids don't keep their bathroom or bedrooms clean... I deduct $1... forget to unload the dishwasher... there goes another $1... Not ready for school in time and you made mom cranky... you get the idea. Most months they get the full allowance... but sometimes not... It just depends.

    As for wasting the money on crap? I have one spender and one saver... The spender of crap is just now starting to understand that if you spend all you money on video games... you have to go to school with ripped pants...

    I don't think there's a right or wrong way to go about it... but what ever you decided... be consistent...

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  7. Sometimes we've thought about giving allowances, but we never end up doing (for some of the reasons you've listed). Our children are 12 and 11. Instead, we of course provide for the things they need, and some of what they want. They have their regular chores- which they do because it's right to pitch into home-life. But my husband and I do watch for 'jobs' that are at the kids' levels which would be over and above regular work- and we offer to pay them for those. Not too much pay (which makes for easy-come-easy-go spending), but enough so they are not discouraged.
    Our kids will go a long time without earning anything, nor wishing for money. They generally only think of it when they've seen something they really want (a specific Lego set, for example). Then we'll talk about it- the quality or long-term use of the toy/item, how much it costs, etc, and set up some jobs for them to earn it. Sometimes we'll 'meet them half-way' on the cost. Again, we don't want it to be discouragingly hard to earn that item, but we do want it to involve some effort and patience. It's a balance and I guess it depends on their age, too. We've always done it this way. Our oldest is now starting to babysit, so she is earning more regular income, of which she both saves and tithes.
    It's very interesting to watch how sometimes, while they're saving up for a specific thing, they change their mind about it or lose interest in it. Occasionally we have actually said 'no' to a specific item, whether because it is poor quality and we can foresee their disappointment in it, because they already have something similar, or because we can predict they are soon going to 'grow out' of it. Sometimes, we've let them 'squander' money so they themselves can experience the let down that goes with that. We talk about it.
    I don't think this is the only right way, but it's what we've found most reasonable for us.
    Whew- that's a long comment! I think I'll post this on my own blog, too. It's a great topic that tons of us parents wonder about.

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  8. We are so awful about this too...we've never been consistent. And...we've been so broke for the past couple of years that it's been hard to even pay the bills that to think of giving them money hasn't been on the agenda.

    What we DO do is...give them a lump sum of money now and then, as we have it, as appreication for doing things around the house to help without (too much) complaining. ;) We take them to dinner occasionally to let them know we appreciate them...and they're hard work at school. When they want to go to a movie or out with friends, we give them money to do it. It's not the best way...it's just how we've done it. I don't think it's teaching them anything about money management...which bothers me. But I guess it's hard to teach something I don't have a handle on myself!! (Justs being honest...)

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  9. Our allowance is not tied to chores. It's just part of being in the family. Although, certain jobs are also part of being in the family. We just don't link one to the other.
    We have the kids keep a spending journal. We allow them to make their own choices (with some occasional discouraging) but they have to write down what they bought, when, and how much. So, they can see how much they WOULD have had if they hadn't spent it on little things.
    Cindy

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  10. Well, my parenting theme was "behavior has consequences". My daughter has used the same theme on her kids, and with more consistency than I did with her. This carries over to allowance, as well as in making other choices.

    My daughter earned her allowance by doing chores. Some were required, some were optional. We had a chore chart with both categories. She had to complete the required chores before she could earn extra money with the optional ones. If the required chores weren't 100% completed, there was no allowance at all.

    She got paid when I got paid. I had made a contract with her, and I didn't violate it. She needed to trust me.

    I did not control her spending, other than one rule: She could not spend her money on food. It was my job as a parent to provide food, and of course I didn't want her spending her allowance on Milky Ways.

    Since I drove a car and she didn't, I did control where we went, so that helped with the spending.

    She is almost 33 now, and spends money like a drunken sailor. So, there you go.

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  11. For us, chores are chores because you are part of the family. Money can be earned by doing separate "paid jobs." As far as guiding their spending... definitely easier for some kids than others. If they are tempted to make a purchase that I just can't stand, sometimes I will tell them to just wait one day. If they still want it tomorrow, I will bring them back to the store. Generally, they change their minds as soon as the item is out of sight.

    When the kids were younger we had "Davis dollars." It was fake money that could be earned by doing chores, being cheerful, kind, etc. They were spent on privileges like playing with friends, limited TV time, etc. Then on Sat we had a little store where they could spend Davis dollars on trinkets, art supplies, or treats. They could even put their dollars in the bank and earn interest on them! It was a great system, but became a bit overwhelming for me around baby #5.

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  12. we give each of our kids an allowance every Sunday. we used to be very hit or miss about making sure we had cash on hand, but over the last 6 months we have gotten much better. I realized it reflected on our own dependability and accountability to our kids...and if we want them to learn those qualities, they will learn them from us. that made it easier for me to remember to pull the cash on Fridays or Saturdays.

    it has been a slow process in teaching/learning not to spend on crap toys that break, but that lesson is reinforced more each time a toy breaks, is thrown away (because it wasn't put away as it should have been after being asked to put it away), or there isn't enough money to buy something new. we use empathy...I know, it's sad when there isn't enough money to buy something else. but Mommy and Daddy have to save our money and wait for the next payday before we can buy some things, too.

    we also try not to rub noses in dumb decisions, but ask questions when there is pouting. 'do you think how you spent your $ was wise? do you think you will spend it like that again? what do you think you could have done differently to be happier now?'

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  13. I'm interested to see what others do in the area, too!

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  14. No ideas since my kiddo is still in diapers! I have wondered about this before though so I'll be interested in the responses. Also, I remember buying a fair share of cheap junk before I realized the more costly, high quality items were a better deal.... I didn't learn that lesson until I was living on my own for a while though!!

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  15. Sorry if this comment turns out to be a duplicate...my other one didn't post, for some reason.

    We have five children, the youngest of which is about your Sam's age (7). For him and for all the others, we've never given an allowance. Our philosophy was that when they were grown, no one was going to give them money for free, so why get them used to that now? So instead, they must earn their money, by doing daily jobs for us, our household, and each other. These are kept track of on their weekly homeschool checklist, and they get paid 25 cents for a 15-minute job (So about $1 per hour). These are slave wages, because our main focus is not the money but rather the work and the service. As they get older, the wages stay basically the same, but the earning opportunities increase!:-)

    They also earn money by reciting Bible verses. We pay 5 cents for every verse, and they can review/recite old ones each week (one time each) for pay. We believe that God's Word is a treasure, so we don't mind paying them "treasure" for committing it to memory.

    Like you, we have them divide their money into Bank, Store, and Church. They actually have a bank that has these three divisions. We motivate them to save by matching everything they put in the Bank, dollar for dollar, as long as they do not spend it. All the Bank money becomes theirs when they turn 18.

    As far as their spending habits, we view this the same as any other training--it requires guidance, oversight, and boundaries. We help them decide on something special they want to save up for and buy, and then remind them of that when they're tempted to impulse shop. If they still want the lower-quality trinket, I might let them buy it, knowing they will have to work to build up their Store money again. I can honestly say that we've seen very little impulse buying on their part. But they've purchased some great items like LARGE lego kits, digital cameras, photography equipment, higher-end dolls, etc.

    Hope this helps!:-)

    ~ Betsy

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  16. We have gone through similar problems, and have finally hit on a method that has been working. I wish I could take credit, but the ideas came from all over blog land, and other websites (I spent a lot of time on this!).

    Each of our children has what is essentially a check register (I made them in excel and we decorated pretty covers for them). Each week they receive $1 allowance (the 12 year old gets $2) no matter what. THey can also earn extra $ if they do extra chores (over and above their usual), especially if they do them without being asked (yesterday my 12 year old noticed that the dishwasher was done, and unloaded it before anyone else even noticed). The check register works because I don't have to have cash on hand, and they get the idea of balancing accounts. Once a month, we decide how much to give to church, and to put into savings. They let me know when they'd like to spend some of their money, and we talk about it, and then debit it out.

    I've found that another great thing about the register is that they are less likely to just spend $ if they don't have cash in hand. When they see that if they buy that dollar store toy, the money comes out of their account, they usually at least think about it for a minute or two (my 4 year old still tends to buy it, but my 6yr old and 12 yr old usually resist).

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  17. My kids, ages 12 and 9, receive a monthly allowance of $5. I went to monthly instead of weekly for the same reason you mentioned: I never had $2 to give them and often forgot. The monthly allowance works much better. I offer to put the money in their savings account or give them the cash, their choice. This year my husband "hired" the kids to clean our horses' barn stalls and pastures daily. We were willing to pay someone else to do this job so it seemed reasonable to pay the kids, too. They split $1 per day, and at the end of the month I add this amount to their allowance.
    I have one spender and one saver. I frequently caution my spender to consider a purchase before making it. I don't allow impulse buys. I ask to know what purchase is in mind before we go shopping. But if the same item has been requested several times, even if I know it's junk, I let the mistake be made. I try to keep a balance between control and freedom. It's definitely a fine line, and something for which to ask God's grace.

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  18. My kids receive allowance on the first day of each month--$1 per age of child. I get the cash out for allowance when I get the cash out for my budgeted spending each month. The money is in $1 bills. They each have three (or more) envelopes. They are to put at least $1 in "give" and they can choose how much to put in the "spend" and "save" envelopes. Sometimes another envelope is added when saving for something special like "guitar" or "fishing gear." It gives them control in a very visual way.
    When it comes to spending, usually they need to wait one day for each dollar something costs. So, if they want a $25 stuffed animal, they must wait almost a month. This eliminates much of the "impulse" buying. They also just are not allowed to buy "little stuff" at stores much--like candy, gum, cheap plastic toys, etc. Sometimes we break the "wait a day per dollar" rule especially for a yard sale or thrift store find that will not be there later. In this case, we usually set up an expectation beforehand about whether or not they will spend money and how much before we go into the store.
    Chores are not tied to allowance. They do chores because they are part of the family and they receive allowance for the same reason. No extra jobs are paid, either, at this point--just part of life!
    Good luck! And all kids are different--just keep working on those life-long lessons!
    Shannon

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  19. We give each of our children an allowance each month but it is not based on chores either.

    We give them the amount of their age: my 11 year old gets 11 dollars. They tithe 10% and save 10% and the rest is their own to spend.

    We don't really buy things for our kids except for birthdays and Christmas. So if they want something they have to save for it and use their own money. We give our girls who are 8 and 11 a clothes budget twice a year. If they want additional clothes than the money they have been allotted then they have to use their own money. My kids favorite store is Good Will because they know their money goes farther there :).

    I personally think it is important for children to have their own money. My children rarely ask for things. And yes some spend it on things I wouldn't (like a $1 bag of chips out of the snack machine) but it is theirs to spend.

    I like Richard and Linda Eyre's books - they have some great ideas on teaching children about money.

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  20. hi :)
    i am not giving allowance yet...my kids are 2 1/2 and 6 weeks... :) but i am thinking about paying my 2 1/2 year old to eat at lunch and dinner... :) just kidding...sort of...
    i follow another blog, 71 toes, and she has 5 children... i find her perspective to be amazing and enlightening... and REFRESHING...

    she has a few posts about allowances... i found them to be so neat...and wanted to keep the information for when my kids were ready for that phase of life...

    if you go to her blog (i will give you the addy in a second), she has a search bar on the right side down a bit... type in allowance and you will get the hits to her entries.... :) good stuff about raising kids... :)

    http://71toes.blogspot.com/

    :)

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  21. We do not give our children an allowance. There are a few resons for this. First, I never got an allowance when I was a child (good for the goose...right). Second, nobody gave me the money that they want me to give them.

    Something I started doing when my kids were about 8-10 was when they would ask for something in the store I would ask them how long they thought Mommy had to work to make enough money to buy that item. When I would tell them how long I would ask if they still thought it was worth it. Most of the time there love for thier mother would shine through and they would say NO. This was the beginning of teaching them the value of a dollar. We would use this on just about everything. Saved us a lot of arguing. We always used moms pay cause it was alot less than mine at the time. Plus they didn't seem to care if daddy had to work all day for a toy.

    Our kids do chores. They will from time to time get paid for extras but this is rare. After all they do have a roof over thier head and food on the table. My daughter is now 14 and has been baby sitting for a little while now and has been saving up her money. Most days she has more money than I do. This stash has started her spending on things that she wants to have or do that we normally would not be able to afford. We try to let her use her best judement, but mosttimes will make her justify the purchase. If she is able to do this reasonably then we let her go for it.

    I agree with many of those that have posted prior and we encourage our children to pay thier tithe. We have many times shared our testamonies with them about being faithful tithe payers. They like us do not question this commandment and pay tithe without hesitation.

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  22. We give our kids $3 each. They give 30cents at church, save 50 in their "long term savings" jar, and the rest goes into their spending. They each have a small plastic bowl with a lid where they keep there money, and I put it in my purse if they go with me to the store. Friday is pay day, but sometimes we do 2 pay days at once if we forget.

    I do generally let them buy whatever they want, but try to steer them away from over-priced junk. I have one big spender who wants anything that is pink. The other one wants to look and touch everything, and then usually only buys one thing and it's normally for someone else.

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  23. We do allowance once a month. Usually the 1st or 15th, I make sure it lands on our pay-day otherwise I don't have the cash on hand:)
    Allowance is based on age, so if you're 14 you get $14 if you're 8 you get $8. First we tithe, then half goes into savings, the other half they can spend or save too. So far it's worked out pretty good.

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  24. I don't have kids but do want them someday in the relatively near future! This is an article I ran across while doing research at work one day and I thought it was full of great, practical advice. Now again- this isn't from experience at all, but I figured I'd pass it on!

    http://hopememphis.com/2010/07/training-your-children-to-manage-money/

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  25. I get a weekly email from Love and Logic Institute and this was this weeks newsletter (then I decided to come to your blog and saw your post so I thoght I'd pass on their thoughts on the matter. I like their breakdown on family chores vs. jobs:

    There are as many opinions about allowance as there are ways to spend money. Many parents think that allowance should be earned. Other folks think kids are too young or immature to ever be given any financial responsibility.

    What do the Love and Logic® experts say?

    If we give equipment to kids to play sports and instruments to play music then it follows we should give kids money to learn how to use it wisely.

    In the truest sense of the word, an allowance allows. It allows kids to learn the value and meaning of money with hands-on experiences. And it allows parents the opportunities to prepare their children for their financial future.

    Here are a few ways to get started:
    •Separate allowance from chores. Chores are contributions kids should do for free because they are a part of your family.


    •Provide opportunities to earn money. If you want your kids to learn to earn money, you can give them jobs to do. Jobs are extra tasks beyond chores that kids can be paid to do.


    •Nothing teaches the value of a buck faster than running out of money when you really want something. The amount of allowance is not as important as kids getting to practice with their own money when mistakes are small and affordable.
    For suggestions for how much allowance, the best time to start, along with age-appropriate lists of contributions vs. jobs, check out my book, Millionaire Babies or Bankrupt Brats? Love and Logic Solutions to Teaching Kids About Money, co-authored with Jim Fay.

    While the value of a dollar may change, the value of learning how to wisely manage a dollar will not.
    L in Elkton

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  26. We have a set of chores our kids must do during the week simply because they are a part of the family. A second set of chores they get paid for...if they have completed the first set all week, and if they are done with the second set by 5pm on Sat. If not by 5pm...no pay. There is also a third set, also for pay, but no pay for these if the the first two sets haven't been done. We used to give an allowance and kids did all chores just because they are a part of the family. When we switched to getting paid for many chores, the kids not only did more, but they stopped grumbling about what they had to do because we made it a rule that if you grumble...no pay! We also have higher expectations now that they are getting paid and they are living up to these expectations. It's been great for us. From the money the kids make, they set aside a predertimined amount each month to go into long term savings and into giving to the church. They set their savings/giving goals at the start of each year. The money that doesn't go to ltsavings or to giving is theirs to spend as they see fit. Good luck!

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  27. This is something I've been thinking about a lot lately, too.
    And something we've been terrible about, too. (For the same reasons)

    It brings up a lot of questions.. How do we teach our kids to be responsible with their money and make wise decisions?

    How do we teach them to save and give?

    How do we prevent the mindset that we make money to spend it and as soon as we make it we need to go buy something?

    How do we tie it to chores, or do we? Because on the one hand, chores are a necessary part of life but on the other hand, we have to work for our money as adults, not have it handed to us.

    Reading through these comments has given me some good ideas.. and I think I see an allowance series on my blog in my near future. =p Also, I'm pretty sure I see a discussion with hubby in my near future. ;)

    One thought I'd had in mind for how to handle the "not having cash on hand" part was to pay in quarters (one quarter per age year, the idea isn't a LOT of money, it's managing it) and that way I can get several rolls of quarters at a time and keep them in an allowance jar or something.

    I like the idea one commenter mentioned about having required chores and extra chores that couldn't be collected on until and unless all the required chores are done.. it got me thinking..

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