Kids' Allowance

[5ft Diva]

Do you pay your children an allowance? How did you decide how much to pay them? How often do you pay them? Do you require that they save any of their money or do you let them blow it all? If you don't pay allowance to your children, do you have an alternative way for them to earn money?

[Dia Minha]

Yes, we pay our children an allowance. They get $1 for each year of their age. In other words, my nine year old gets $9 my eight year old gets $8. Well that is the way it will be soon. Up until now they have each been getting $5, but my older children are needing more, because their expenses are more. DH gives them their allowance during what we call PPIs. He helps them make change for tithing and encourages them to put half into savings. So they would get $5, pay $.50 for tithing and put $2.50 in savings, then have $2 to spend however, they want.

Now if they need or want more money, we have an ongoing list of Chores for $. The list includes what is expected and how much they can earn to do it. If they do an exceptual job I will pay extra. In return if they don't do everything that should have been done, they get paid less.

I'm hoping that as they get older, I will be able to pay them more money and then they will be responsible for buying more of their own neccisities, such as shampoo, deoderant, name brand clothing, make up, hobbies etc. I want to work them up slowly. So when my oldest daughter decides she needs "special" shampoo and starts to wear makeup then I will increase her allowance, but she will have to learn to budget it so she will have enough to purchase these items. And when my son decides he needs those $50 athletic shoes he will have to learn to budget and save to purchase them.

I believe that some things should be provided to my children, just because they are my responsiblity. However, I will pay $15 for a pair of jeans, but if they want a name brand $40 pair they will have to make up the difference. And until they start to complain about what I am buying them, I will continue to provide it.

I feel like I'm not making much sense. Hopefully you get the idea.

[runamyrun]

Dia, I agree with what you wrote. Have any of you read "The Parenting Breakthrough: A Real Life Plan to Teach Your Kids to Work, Save Money, and Be Truly Independent" by Merrilee Browne Boyack? It is a really good book. Some of her ideas might be a little extreme for me right now, but I really love a lot of her ideas. She talks about how there is a boomerang syndrome with children now. We tend to take really good care of them, so when they move out, they realize how nice home was so they move back in. Her plan is to teach children how to do everything (when they are an appropriate age-she even has a plan for that) so that when they move out they can truly be successful.

For allowance, she gives them $1 per month for each year of their age. For example, my son is 6, so he gets $6 a month. He immediately pays tithing and then he puts at least 10% into savings. We match the amount he puts in savings. After that, he has $4.80 to spend. If we are at the store and he decides he wants some kind of treat that I am not planning on buying, he can use his own money to get it. He loves Bionicles, and the ones he buys are $10. He usually saves his money until he has enough to buy a Bionicle, which takes him 2 or 3 months to have enough. I love this because it is teaching him to wait for things, instead of instant gratification.

If my son is really close to having enough for his Bionicle, he can do a money chore. We haven't done this very much yet, but I figure it will happen more when my kids and their wants get bigger. Oh, and I better clarify. Our kids don't get paid to do regular chores. I don't get paid for what I do, and when you live in a family you all pitch in and help each other. Money chores are things that are extra or something a little bigger. For example, last year my son wanted a little more money, so I had him clean under the toilet near the floor, where he had aimed poorly. I was tired of cleaning that, so I paid him a little bit to do that. Now that is just part of his job each week (without pay). I have also paid my kids to vacuum our car. I have also paid them to clean the baseboards. I just think of things that I hate to do (isn't that awful!) and that I am willing to pay to have done. Depending on how much work is involved, how good of a job they do, and how long it takes, I figure out how much that is worth.

In the book, when her children turn 12 she stops giving them allowance. She figures that by that age they can do enough money chores or babysit or do yard work. They also get an annual clothing and school supplies budget at age 12. Before school starts they sit down and figure out what they will need for the year. The mom totals everything up with Walmart prices. Of course the child might want more expensive clothes so they get fewer clothes or figure out how to pay the difference. She mentions that one year her son spent $100 on a pair of shoes and when summer came he didn't have money to buy a swimsuit so he swam in jeans shorts.

My husband and I try hard to be frugal. If we hadn't been this way, I feel that we would be in a lot of trouble because of my son's huge medical bills. Fortunately we have been blessed and had enough to pay for his surgeries. It has been hard and definitely not fun, but we have been able to do it. We have several family members who seem clueless with finances and they are paying for it. It makes me want to take control of their finances! Anyways, DH and I feel very strongly that we want our children to learn how to be frugal and be smart with money. Can you tell that this is something important to me? Sorry I went on for so long!

[Dia Minha]

Amy, I think we are both on the same page here. I agree with everything you've said. My ultimate goal is to have my children move out at an appropriate age and never move back in. Everything I do to teach my children is all moving toward that goal. Sometimes it can be frustrating, because they become so independant at such a young age, but I know it will be worth it in the long run.

I need that book. I've seen it at Latter-day book. I'll have to see if I can squeeze it in next week's allowance.

[5ft Diva]

You guys are so on top of things in your household. Amy, I love how you encourage your kids to save. We have required our kids to save 1/2 their money and then one day I told BS that I felt like our kids should decide if they want to save but that we would encourage it by matching their savings. I really like that you require at least 10%. That would totally work for our situation. We, too, pay our kids a dollar for every year they are. And I also like that idea behind giving the kids an annual budget once they are 12. I may hold off for a little bit before doing that, but it definitely weans your kids off of expecting an allowance. I don't think I want to be paying my 17 year old an allowance when he has a job.

You guys are so smart!

[natickgirl]

Great ideas, everyone. I've been meaning to start paying our kids allowance for several years, but haven't. Our oldest is 10 & definitely needs to learn delayed gratification & money management skills! Should have started it years ago, but I'm lame & disorganized.

I like the idea of paying $1/year every month. Do you pay weekly, or at the beginning or end of the month? Do they get allowance if they haven't been doing their share of the regular household chores? Do they have to use their own money to buy other's birthday presents or do you pay for that? Do you ever not pay them...for example if you take a big family vacation or something? If money is particularly tight one month, do you give them a rain check? What about school expenses such as fieldtrips, special activities, etc...do you pay for those or do the kids?

Any advice would be appreciated. I want to do it right.

[5ft Diva]

These are great questions, NG. Answers that I'm interested in as well. As far as how often I pay my children - it's monthly. I used to pay them weekly, but it was too hectic to do it. However, when I was a child my parents paid me weekly and I really looked forward to it.

[Dia Minha]

Natick, we pay monthly. The first Sunday of every month my husband does a father interview with them. He talks to them to see what is going on in their life and talks about things he has noticed them doing well. He also asks them what they think they need to work on. It is always amazing to me what they come up with, because they are usually very insightful.

We do not connect their monthly allowances to their daily chores in anyway. We have tired doing this several times, but takes too much tracking and gets very confusing. I believe, a small allowance, along with doing chores is just something that is done, because they are a member of the family. We do however offer extra chores that they can do to earn extra money. These I just pay them as soon as they are done and I have inspected them to make sure they are done properly.

Because it is so hard to know in advance if they are invited to a birthday party, I do not make them use their allowance to buy a gift. However, I do set a limit that I am willing to pay and if they want to buy something that is more expensive they have to come up with the extra money. I'm sure this will change as they get older.

When we were first starting out, we would forget to pick up cash to pay them and then we would forget to pay them all together. We recommitted at the beginning of the year and haven't missed yet. We have never just not paid them, because of a family trip or tight expenses. I think that if you tell your kids they are getting an allowance every month, you just need to keep your word and do it. When we first started out our budget was so tight it was hard to squeaze out the money, that is why we capped it at $5. This year we are feeling like we have a handle on things so we are going to try and increase it.

If it is a school activity we have always covered it for them. If it is a family activity we pay for them. Basically their allowance is just small amounts to spend on treats and toys that I'm not willing to pay for. Sometimes they just want to go to the $1 and spend $1 and they will use their allowance.

As they get older, I'm guessing around 12, but I'll see when we get there, I will increase their monthly allowance, but give them more responsibility to go with it. They will have things they will need to buy themselves and budget and save for. I'm all for children getting a job as they get older. However, I was made to pay for a lot of items while going up that I couldn't afford and went without a lot because of it and I'm not about to have that happen to my kids, so I will probably keep paying them an allowance until they can get a real job at 16.

Hope that helps.

[natickgirl]

Thanks. Sounds like you have a great system going.

[Meticulous madness]

Wow guys, thanks for all the great ideas. I, too, have been wanting to incorporate an allowance system into the mix. My parents didn't offer an official "allowance" when I was young (neither did DH's, atleast I don't think) and I have been clueless with how to start with our own family.