I’ll admit upfront that this is a polarizing topic. Some parents (about six in ten*) firmly believe in giving an allowance; others feel it’s unnecessary. I’m sure you can guess which camp I’m in (not-so-subtle hint: it’s the former).
Why do I feel that way? Because I give an allowance to my kids. And I think that it has helped them grow into financially responsible teenagers. The truth is, an allowance is one of the best tools in your toolbox as a parent.
I’d caveat that, of course, by saying that you have to go about it the right way. For one, you can’t forget to give it (I’ll admit, I’ve been guilty of this in the past, but I’m much better about it today. It’s important to be a stickler here because if you’re late paying your kids, all you’re really teaching them is that it’s okay not to pay their bills on time – not a lesson you want to be passing on).
You also want to use this cash to impart a lesson, which is that money – both yours and theirs – is limited. If we want to make the most of what we have, we have to make some hard choices.
Here’s my allowance philosophy:
- Pick a starting age. I think children are ready for at least a small allowance when they start school, but every school and environment is different, so take your cues from those around you. (Just a note: In general, I hate approaches that border on keeping up with the Joneses, but in this case, I think it’s a good rule of thumb). If none of the other kids get an allowance, you probably don’t have to give one yet. If they all do, it might be time to kick one in. And if your kids are a few years apart, the younger one is likely to want an allowance when you start giving one to the older one. That’s okay, too, provided the amounts are age-appropriate.
- Settle on an amount. For this, look at two things: What are their friends getting? And what do you want them to be able to pay for? For my purposes, I kept track of what I was spending on my kids for a week or two, then I picked one or two items that I thought they should be able to pay for out of their allowance. So maybe it was an extra snack at school, or a movie with their friends, or the gift they needed to bring to a birthday party. Whatever you decide, you need to give them enough money that they can buy some of the things they need and want, but not so much that they can buy everything they need and want. That happy balance is key. As they get older, you’ll probably want to increase the amount you give, but you’ll also add to the list of things that they’re responsible for paying for.
- Enforce it. If you say you’re no longer footing the bill for movies, and they run out of money before the weekend, you have to tell them they’re out of luck. They will not be going to the movies with their friends this week. If you instead bail them out, you’re defeating the purpose of the allowance because you’re not teaching them to pick and choose how and where to spend their limited dollars. And, perhaps worse than that, if you bail them out, even just once, they’ll be back for more. I promise.
Are your children on an allowance? Has it been good experience for your family?
According to Boy Scouts of America 2011 Youth and Finances research