How many kids grow up into adults who think that things should be given to them instead of needing to be earned? That there is an endless supply of money that can be spent and that instant gratification is their right? There is one powerful tool we as parents have to combat these feelings of entitlement and it is called an allowance. If you don’t offer one now, I would recommend that you sit down for 15 minutes each day this week (with your spouse if you are married) and decide how much you should give your children for an allowance, how often they will receive it, how they will earn it and what it is to be used for. An allowance provides life lessons for kids that will be useful for them to learn while they are at an age where you are still around to guide them.
One of the reasons I decided to start providing an allowance for my children was so that I could follow a budget more closely. It is challenging to keep a budget if you aren’t planning for how much money you are spending on toys, video games, movies with friends, etc. Things felt much more random too (form me and the kids). If I had just gotten paid and we were at the store and my boys wanted a new toy, I might buy it joyfully knowing how much they would enjoy it. If it was the end of the payday and they wanted something I might be annoyed that they wanted yet another item. They never knew when I would say yes and when I would say no so we got into a constant cycle where if we were at a store, they figured that they might as well ask for what they wanted because they never knew what my answer might be. I hated how random my buying seemed and wanted to find a solution that made more sense.
The benefits I have seen with providing an allowance have gone far beyond just helping me budget more wisely. My sons are now all teens and they have received an allowance since they were in elementary school. Currently, the two younger kids receive their allowance every other Friday when I get paid. The oldest one has a job and doesn’t receive an allowance any longer. For the younger ones, their allowance has to last them two weeks. Here are some of the life lessons we have seen with using an allowance.
- Life Lesson #1: Learning how to budget – If you spend all of your money as soon as you receive it and don’t set aside part of it for future things that might pop up, like a friend wanting to go bowling later on in the week, you end up missing out on those fun experiences or have to figure out a way to earn more money.
- Life Lesson #2: Money must be earned. In our house, allowance is tied to chores and so if the kids do their chores each day, they receive their full allowance. If they get busy or forget to do their chores one day, I take away some of their allowance as payment for me having to complete the chore for them. Lesson learned…if you are too busy to complete your own work and have to hire someone to do it, you have to pay for it. This is similar to what happens in life as an adult. If you are too busy to clean your house, clean out your car, do your laundry or cooking, etc. and have to hire that chore out for someone else to do, you have to pay for it.
- Life Lesson #3: Earning more money above and beyond your allowance requires more work and larger chores. These chores are in addition to the chores expected to be completed each day and might be something like cleaning out the refrigerator or raking leaves. I think of this as being similar to working overtime or picking up an odd job.
- Life Lesson #4: Learning how to save – If you want a larger, more expensive item like a t.v. or video game system, you will need to save your money over several months to make that purchase. These higher priced items are appreciated and well taken care of when the child buying it sees how much it is truly worth and how long they had to save and sacrifice other things for the desired item.
As parents we can set up our children with the principals needed for successfully managing their money. As adults they will have the skills they need to work hard, budget and save their money. What are some of the benefits you have seen with giving kids an allowance?