Allowance or No Allowance?

This is the problem with allowance and rewards for young kids. The truth is they DO get bored with it, and eventually they don't want to do their chores anymore. And it's not like money is a motivator when they are little, they don't really need it.
My kids always had jobs around the house because that's part of being a family. It was just expected. Nothing major, just age appropriate things like setting/clearing the table, feeding/watering the pets, taking out trash, etc. When they got older and started asking for money and other extra things (around 10 or 11) we gave them bigger jobs to earn money, like cleaning out the car, working in the yard, scrubbing the baseboards, stuff like that. They also did pet sitting/feeding for neighbors and eventually started babysitting.
I'm all for teaching kids the value of money, but I also think it's important to teach them they don't get rewarded or paid for things they should be doing anyway.

I think a monetary allowance is an excellent way to teach money mangement. Whatever the amount, it can teach them to spend, save, and tithe. It will also teach them budgeting skills as well as the opportunity costs of their choices.

If done correctly it can be a great lesson in economics and personal finance. I feel the earlier kids learn this the more fiscally responsible adults they will be.

It can be tricky to figure out the best way to handle this issue. And usually, kids react to the way it is presented by the parents.
Really, the goal isn't just to teach them that nothing is free, (although it should do that too), and the goal is NOT to have them think that they don't have to participate in the household chores if they choose they'd rather not have cash.
The bigger goal is to teach them money management. Which you really can't do if they have no "stake" of their own in the game.

There are responsibilities in our house that the kids receive money for doing, and doing them isn't negotiable, either. (taking out the trash for example). But they also have responsibilities to do things that they do not get any money for doing, that are also not negotiable (cleaning their rooms, changing the sheets on their beds, putting away clothes, etc). Then there are "bonus" things that they earn money from sometimes, on an as needed basis: fall clean up in the yard, an all day thing, might garner them some extra cash. Pulling weeds, etc.
But they are not paid for every little thing they do, at all. Far from it.
However, they DO have their own "stash" of cash now, and they have to figure out how to manage it. We guide them in this, and can and do refuse to allow them to purchase things we will not allow them to have. They are still our children!
It is interesting to watch. One child is more of a spendthrift than the other, but over time, they are both getting more discerning about how they spend their money. Which is the whole point.

We do not give allowance to our kids. They are expected to do certain chores to help keep the house running -- they each do their own laundry, they work together to clean up the kitchen after dinner (I cook), and on the weekends they each have a larger chore like vacuuming or mowing the lawn. Everyone pitches in. They don't deserve to be paid for basic daily activities they will not get paid for later in life. We will sometimes offer additional stuff for pay or "things" -- our 17YO will clean out the garage, for example, in exchange for a new video game or having a few friends over (we get the supplies/snacks/etc.)

We used to do an allowance and it started around age 6. Then I read a finance book by Gail VasOxlade and changed to getting one dollar a week for each year of age so my kids get 8 and 10 dollars a week. They still have to do chores but they are not tied to the money. They can do extra chores to earn more money. With this change we quit buying their toys for them, they use their own money. Sometimes they save it up for something that costs more sometimes they don't, it is their decision. It has made our lives a lot less stressful money wise and the kids are learning how much things really cost. One time my son bought a hot chocolate for me with his money and they contribute to the vacation jar on their own as well. You guys need to come to agreement on this, it is one of the big deals in parenting. Take the time to figure out what will work for both of you and remember if it doesn't you can make a change to it.

i understand your dh's pov (kids should help out because families pull together, not for money) but it's also very important for kids to learn about money, how to budget, and how to be responsible spenders and savers. if your dh doesn't want her allowance tied to her work around the house, just give her one. you can still use the incentive chart with other rewards.
but definitely start educating her about money and let her start learning how to handle her own. she's at the perfect age to begin.
khairete
S.

My husband and I grew up without allowances, so our son does not have one either.
All allowances do is to train up little consumers before they have ANY idea how hard it is to earn they money they spend.
Everyone helps with chores because that is the price for living here.
No one gets paid for cleaning their own toilet.
Our son has saved every penny he gets his hands on (tooth fairy money, gift money, loose change) and feeds it to his piggy bank and he never talks about spending it.
For his great behavior and straight A's, he gets several trips a year to the book store and I'll get him anything he wants - it's his favorite treat and he works hard for it.

We feel exactly like Michelle M., and do not pay our children allowances for doing household chores. They are 8 and 14 years old. They do earn money sometimes by doing extra chores that are above and beyond regular chores, like raking pig poop, trimming bushes, stacking firewood, etc. They also help my parents with things they need to have done. Sometimes they get money for birthdays and other occasions. My oldest has an actual job at the state fair in the fall, and earns several hundred dollars. They have plenty of opportunities to learn about money management. We also discuss our own finances with them. I want them to learn how a happy family works together without having to be paid to do it. We work together because we want to help each other get our work done efficiently and done well, not because there is a payoff.

Curious, does your husband's job offer raises, promotions, awards, etc? Aren't those incentives encouragement to go above and beyond the required work for the job? When do we begin to teach our children and how do we teach them?

We give our kids and allowance. It is both incentive based and non incentive based. It's really not a big deal. The most important thing about the giving of money and the receiving is the learning of how to manage it. We teach our kids that too.

We haven't done it yet - maybe we should (oldest is 6). The two theories I have heard are:

1. Kids should have choirs because they are a part of life. Everyone in the family contributes to the good of the household. Do not tie allowance to choirs, because we all contribute to the household, period.

2. Kids don't get an allowance, they get paid for each job done. This is to help teach kids that we earn our money, it's not just handed to us. If there is something we want (a new toy, for example), we need to find ways to earn the money to pay for it.

I see great value in both points, so I'm undecided. As I was typing this, there was a segment on the news about allowance, and it said that half of parents in the US start allowances by age 8. Hmmm.

Why is your husband against giving an allowance? Just curious, because I would be very interested in what his concerns are.

I tend to think there needs to be money given to the children at some point. Part of life is learning how to earn money, properly manage money and spend wisely. Kids learn best by doing, so this provides a very important opportunity for the to learn in very small doses.

Sorry I didn't really answer your question. I really think you do have a couple of years to decide what would be best for your family. Good luck!

Check out this advice from Ric Edelman regarding kids and money ...

http://www.ricedelman.com/cs/education/article?articleId=...?

And this one too ...

http://www.ricedelman.com/cs/education/article?articleId=...

Ric Edelman is the chairman and CEO of Edelman Financial Services, LLC., the author of several personal finance books and the host of a syndicated weekly personal finance talk radio show called The Ric Edelman Show. Edelman was ranked the #1 Independent Financial Advisor in the nation by Barron’s in 2009-2010.

When my children were growing up, they were given an allowance (that is, pocket money) from about your daughter's age. The amount was so small it would probably shock you. The reason they were given an allowance was because we wanted them to learn how to use money properly (and we structured the use of that money), but we didn't want them to believe that they were entitled to payment for any little thing they did at home.

Making their beds, picking up their own toys, setting the table, feeding the pets, etc., were jobs they did because they were part of the family, not because they were being employed by us to do them. I did make charts so they could see what they needed to do and so they could check the jobs off (which is itself a basic form of reward) as they did them. When they grew older, they were able to *work* for money, both inside and outside the home. There were extra jobs they could do, for pay, when they were old enough and capable enough.

I see the other side of it, too. My older son and his wife have their children earn their allowance - in the sense that, if they don't do what they're expected to do at home, the money is not forthcoming. He says that since it works that way in the business world, it can work in their home. It seems to be successful; the parents are on the same page about it, and the girls are pretty good about their responsibilities.

Is, perhaps, your husband thinking of allowance/reward as a type of bribery to get a child to do what she should do anyhow? If so, that's worth discussing. It *can* turn out that way - when the child starts taking the upper hand and saying, "You want me to do what? What'll you give me if I do it?" But that can be easily dealt with. That's an attitude thing.

Rewards can be useful. Eventually your daughter will learn how to reward herself. (It takes quite a while, though, for "I did my work well" to be a reward.) Rewards, too, are capable of getting out of hand. That's why it's necessary for the Mom-and-Dad Team to sit down and talk it through. "What's our long-range goal in all this? What do we want to teach? How can we teach it best right now?"

My kids do not get an allowance as of yet, and when they do, they will not have to earn it. We do not do rewards and charts and things in this house. I do take away their daily candy if they behave badly, but they get candy every day, whether they do their responsibilities or not. As I see it, everyone has to contribute to the household economy because they are members of the family, living in a shared space.

When my daughter turns 5, we will start giving her weekly pocket money. it will not be tied to chores or activities. It will be pocket money for just being a member of this family.

When the big kids were little, they got a dollar a week. Then it was $5 in middle school and $10 in HS. Each level also came with greater expectations and if those expectations were not met, they may lose money. If they missed the bus, it was $10 a trip to get to school, paid to whoever had to drive them. I would keep the responsibilities just because she needs to contribute to the household. For the money - what is your goal? A reward? A way to teach money management? Just some of her own money? If you are trying to teach her to save up for things, then open her own account (most banks have a young savers program). Then she can go to the bank and put her savings in and feel like a big girl.

No. I do not give my kids an allowance.

They are given chores to do. These are because they are part of the family and we work as a team to keep our house/property clean and maintained.

If they do something above and beyond their normal duties, like a huge clean out the garage day then they are rewarded - ocassionally it's cash, but usually a special treat of some type.

Many parents will argue that an allowance teaches a child the value of and how to spend money. I won't argue with that. However, my children to have their own money from gifts. If they need or want something, they have learned to wait until it's time to receive a gift (like Christmas). Or (we pay) we will give them a limit as to how much they can spend, but let them choose the item.

We don't...yet. My son is six. I feel like he contributes to the family quite a bit. None of his chores take long. But they help keep the household running. We have told both our children that chores are just a part of being in our family and keeping things running smoothly. We all have to do our part. Right now, neither my husband or I feel like he should get money or incentives for this. Now, when he's older and the chores get more labor intensive and take longer (like mowing the lawn), then yes, we will consider an allowance.

He does save money from birthdays. ANd neighbors have taken to hiring him to collect their mail for them when they go out of town. And his grandparents have hired him for special chores at their house. Occasionally, when he is saving for something we will find something extra for him to do here. So he is learning the value of money.

My brother and I started getting an allowance in 6th grade. We both had a daily and weekly chore list to complete. At the end of the week we got $5. I saved every penny and saved all my babysitting money (for college). My brother spent money as soon as he got it. He still kind of does this as an adult. My mom was great with finances and did all she could to try to teach him, but I think it is just his personality. Our son (age 8) does not get an allowance but any time he gets the smallest bit of money he instantly spends it on some cheap toy. Even if he wants something expensive, he just cannot save for it. He wants to buy buy buy. Yikes. I don't know if we will give him an allowance eventually or not...but we will keep working on teaching him the value of money and the importance of saving. Our lessons don't seem to get through though.

I don't have a problem with some kind of reward system but I never gave my kids allowance. Why should the reward system not including paying them for certain chores, kind of like the way the world works?

I guess if they have chores and do them without a lot of fuss, then a minimal allowance is appropriate. However, my kids found jobs as teens, because without them they had hardly any money. Most of their friends who received generous allowances weren't similarly motivated.

We work with the Dave Ramsey Jr stuff - teach about commission and fines. Just like the real world, if there is no work done, there is no money earned and the chart has minus' as well as plus'. There are certain things on our list that must be done as being part of the family and things that are there for a commission to be earned. It only totals $2 a week.

This helps with counting money, we put $2 in coin on the table and say this is what you could have earned, but then take away if there are fines. We count, etc. We store the money in Save, Give and Spend envelopes. This not only should help with chores, etc, but with counting and math and with learning about money - have to work, to earn it, have to save it up to spend it, etc. I highly reccommend it.