Giving my kids an allowance is helping us get out of Debt
The age-old question of whether to give kids an allowance or not has been a lingering sore-spot in my life. For years, I tried to give my kids an allowance but I didn't actually have a handle on my own finances. I was not working with an on-paper budget; I was just trying to make sure all the bills were paid and groceries were in the pantry. There just never seemed to be any wiggle room for me to pay out the allowance. I was also dealing with whether or not the allowance should be tied to chores. I have found that there are strong arguments on both sides of that coin. When I promised allowances and then didn't deliver consistently I was not teaching my children a good lesson so we just did away with any talk of allowances.
Fast forward a few years when I finally bought into the Dave Ramsey plan, began paying off debt, doing an actual budget, and, I thought, doing all the right things financially. But as I looked over my budget and my spending I realized that my kids were rather spoiled with stuff and spoiled into thinking that they could get stuff most any day or time. Rather than deal with them as a parent should when the whining began, I just bought them the candy bar or bouncy ball. They never asked for big stuff unless it was for their birthday but all that little stuff adds up. I just took the money out of the grocery budget. This wasn't good for them or the family. I began talking with other parents about allowances and doing a lot of searching online for help.
I think I may have finally settled the allowance question once and for all in our house. It is working in my favor and actually helping my family get out of debt. Here's what we're doing and some of the things I learned along the way.
First, my husband and I decided not to tie the allowance to chores. That is not to say that they don't have chores. They each have a list of stuff to be done daily and weekly. Doing household work is just what is expected of everyone in our family. When all of the housework is done we are all rewarded with free time to take a walk, ride bikes, play a boardgame, or watch a movie. We also decided this based on the fact that when the kids were offered money for doing a specific chore more times than not they just decided it wasn't worth their time to do the chore. They had no reason to need the money because mom would always buy them what they wanted!
Second, my husband and I discussed what the allowance should be for. First and foremost it is on-going financial lesson for the kids. Neither my husband and I were never given an allowance and never learned to manage money. We see where that got us: deep in debt at an early age. We made a list of all the things we had been paying for: birthday party gifts for their friends, clothes, toys, video games, shoes, outdoor sports equipment, field trips, book orders, Christmas gifts for others, and all sorts of other things that just come up out of the blue. We decided that most of this stuff should be paid for by the children. If they paid for it with their money they would value it more, enjoy it more, and be forced to learn that money is limited. They can't have everything all the time. Each child gets $10 per week, every Friday. They tithe 10% to church but the rest is really up to them. (At this point we are not forcing savings. We are trying to let them discover that they must save a portion of their money each week if they want to buy something more expensive.) This is costing my budget $120 per month which looks like a great deal of money but believe me it is less than I was spending on them before. Remember, they are now paying for everything themselves.
Third, they may choose to earn extra through additional chores. We have list that they choose from each week. So far, they are choosing to earn $1 to $2 more per week.
Fourth, they may have to pay mom and dad. This is the part that takes work for me but it also part of the teaching process. A child may have to pay for the following:
~leaving lights or television on in their room (electricity isn't free)
~having mom do their laundry (coin laundramat style)
~talking back to mom and dad (you can't yell at your boss)
~not eating what mom cooks for supper (they pay $1 to eat something else that we have on hand because they will have to pay to eat out when they are adults)
~having mom clean their room (sometimes it is nice to pay for a good cleaning)
~not knowing where something is that is their responsibility (ballet shoes! backpacks! In the real world replacing items we lost costs money)
As a mom, giving the allowance has taught me some things about my kids too! My oldest is very much like me- a spender. She usually has no money left each week. My son is a thinker. He usually spends most of his money but really thinks about what he wants or needs and prioritizes his money. This weekend he bought a fish for his tank and is saving the rest. My 2nd daughter is a saver. She usually has all of her money left each week. It pains her to spend the cash. Now that I know these characteristics, I can work specifically with each child to teach them more about money.
It seems very strange that giving my kids a portion of money out of my very tight, getting out of debt budget has actually helped us pay off debt. No longer do I spend extra money out of the budget to buy stuff for my kids. If we are at a store and a kid asks for something, I just simply ask if they have their money with them. I don't feel any pressure to buy it anymore. So for our family this has been a win-win situation. It also makes it that much sweeter when I suprise the kids with a trip to get ice cream cones or buy them a new shirt. They actually appreciate it and know that mom is making a sacrifice to give them something that they neither earned or deserved. I gave simply because I love them: the greatest truth and lesson for all the ages.
14 frugal-minded friends say:
LOVE how you are doing your allowances! We don't have kids yet but I'll definitely be remembering this technique.
Great idea! You are right, allowance doesn't work on chores! Everyone lives here, everyone cleans something! I'm gonna talk to my husband about this one. For us I think $5 would be better. Since mine are homeschooled they don't know anything about brands or ipods....yet! And lets face it, you can get a lot at the dollar store for $5! This will also give me something to work up towards. I think instead of every Friday I'll do paydays. My son often asks why I can't buy something until we get daddy's paycheck. This will help him understand the time frame.
fantastic post! i've linked you!
We pay our kids 1/2 their age a week for allowance. They get a raise each year on their birthday and really look forward to that extra $.50 a week. It has been a good amount for us, an 8 year old only needs $4.00 a week and our 17 year old does well with $8.50 a week. It is a little tight but teaches them to choose what way to spend it the best. My 17 year old goes out to eat with friends two to three times a week. She always eats at home first and just buys a coke or a fries. Funny how she decided that it was too much at the restaurant. I just wanted to throw this out for others to consider options for their family- I think your method is great!
My oldest 2 get $5 a week and have chance to earn extra. My oldest goes to my mom's house once a week(she's disabled) and will dust, put away dishes or do little tidying up and my mom gives her $2 or $3.My son helps my dh for extra money. Both of them are planning to do lawn work this spring and summer to make more money too. We've already have a formula for savings, spending money, business expenses, etc set up. Relatives usually give them money or gift cards for fast food(never more than $5 each) instead of candy on Valentine's day, Easter, etc.
Angie, I think this is a great idea! This has always been a hot topic with our family and frinds.
I think this is a great solution.
Love this post! We are still trying to figure out exactly how to make allowance work in our home. We have never done it before, but now our oldest is almost 9 and we are thinking about starting this. This post gives some great ideas! Thanks.
BTW, I don't know if you've hit Publix or Winn-Dixie this week, but there are some good deals. I posted what I got today (combined I spent $43 and saved $130!!)
What a great system!
I didn't quite have an allowance growing up, per se.
Instead, my mom gave me a certain amount of money each week. I had to use it to buy school lunches and snacks for track practice.
Whatever was left over was mine to keep.
If I had some sense back then, I would have packed my lunches and pocketed a lot more money!
I should add that I loooved school lunches, seriously. So I don't think I would have enjoyed packing a lunch.
Thanks so much for this post -- it is so helpful! I love the approach you're taking. Do you mind my asking how old your children are? At what ages did you start doing this with them? My oldest is 5, which may be a little young yet.
My kids are 10, 8, and 7 and we've been doing this for almost a year. I initially thought $10 was too much for the smaller ones but knowing our busy schedule and my not so great record keeping skills we decided to go for the same $ amount per kid. Once they hit 8th grade we will adjust the allowance for that child. I'm sure as they get older the things they are expected to spend their own money on will expand and they will also have the ability to work for more money outside our home.
This is great. By spending this money, you are making an investment in their future. You are teaching them a "priceless" lesson.
AWESOME lesson! I never thought about that (I too did not have an allowance and did not learn to handle money). We have been doing a lot of Dave Ramsey in the house with the children and it is paying off (you can read about it on my blog). We are starting young with them because we want them to have a handle on finances before they are in the position of having a LOT of money. We too make our kids pay (for wasting water/food/electricity). I never thought about the other paybacks!! :) WONDERFUL post!
I love this post! My husband and I have taught Dave Ramsey's FPU and are thrilled whenever we hear about other's ideas! Thanks!
When I was a kid, my sister and I received an allowance and we had to pay for our school lunches out of that. So we decided to save our money and bring lunch from home. However, my mother figured out what we were doing (and the fact that SHE was now spending more money for our lunches), so we had to start paying her for lunch. We quickly gave up on that idea and bought lunch at school. Smart woman!
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