Children And Allowance

[jfortun]

I suspect there are a few parents on the board and for them I have a question:

How do you handle (if at all) allowance for your children? At what age do you start, what are the conditions of recieving allowance, do you guide their use of it?

[Brent Rolfe]

I suspect there are a few parents on the board and for them I have a question:

How do you handle (if at all) allowance for your children?  At what age do you start, what are the conditions of recieving allowance, do you guide their use of it?

jfortun,

We never did give our son an allowance. He has just gone off to university and for the first time gets spending money deposited into a bank account.

Looking back, I do NOT think this was a good idea. His budgeting skills are somewhat limited and he is having to adjust very quickly to living within his means.

However, I never liked the idea of cash for chores either. The household chores are everyone's responsibility, everyone benefits from an organised and clean house, and noone gets paid (in cash) for doing them.

Friends of ours, on the other hand, when there son was in his early teens, calculated the amount that they would spend on him each year for clothes, meals/movies out, cosmetics etc etc and gave him that amount of money each month. He then had to buy his own clothes, movies, pay for himself if they went to dinner.

I like that idea and I don't think the fact that the kid turned out to be a complete brat was a result of the method of financing.

[Elle]

My parents never gave me a set allowance. However, if my sister and I wanted money for additional expenses (candy, movies, clothes etc.) we could request jobs in addition to our household chores. I remember my mom making a list of jobs and their value and sticking on the refrigerator, something like:

wash kitchen floor - $2

wash cars - $3 a car

wash dogs - $1.50 each

It was fun, gave us something active and productive to do in the summer (my mother didn't let us hang out inside or watch TV), and my sister and I would get very competitive over who got to do the "best" jobs. The overall message was also good - because we valued the money they gave us and we were much less apt to spend it all in one place.

In response to the previous post, I think not having an allowance all through childhood and then being expected to be able to budget for the first time is not a realistic expectation on the part of parents. Just because someone reaches the age of college-bound student doesn't mean he has the knowledge and the skills required for budgeting. I know when I moved out of my parents house I was suddenly amazed by all the little expenses which kept on adding up. An allowance, if earned through some kind of reward system, could potentially go a long way in helping kids learn to budget their money.

[stephen_speicher]

I suspect there are a few parents on the board and for them I have a question:

How do you handle (if at all) allowance for your children?  At what age do you start, what are the conditions of recieving allowance, do you guide their use of it?

Personally, I think that the first four to six years or so you just love them a lot and give them everything you can. Eventually, as they mature and the things they want get bigger and bigger, they learn that they cannot get it all. When they grasp the connection between wanting things and the money which buys it, then that is the time for allowance. It is amazing how proud and joyful a child can be when he saves up his allowance, or supplements it with earning more money, and purchases some little thing that he likes.

In general the allowance should be in accord with your standard of living. But, regardless of the amount of your wealth and how much you give your child, too much overseeing of how he spends his allowance is not a good thing. You try to teach the principles involved early on (a bright child catches on to these quickly) but there is nothing like finding out on Tuesday that you spent all your money and you do not not get any more allowance till Saturday. Amazing how that can straighten you out next week.

[jfortun]

Brent,

Growing up, my parents paid me for work that was outside the normal upkeep of the house. For example, my parents chose to burn wood to heat the house so while I did not get paid for cleaning my room, I did get paid for help cut down trees and split wood. I was paid a very very good wage for this work. This was great for me as a kid, but the result was that I always had however much money I wanted and it didn't teach me much about the value of a dollar.

As a parent I believe that paying for clothing, food, even entertainment is part of the what I signed up for, but paying for everything isn't going to teach my children any money mangement skills. I think your example of giving a teenager a monthly spend makes some sense.

I have a 4 year old and we have started giving him 2 dollars a week that he can choose how to spend (with a bit of guidence). For a 4 year old I think this is fine but as he grows older the issue becomes more complicated.

I was wondering what other Objectivist parents think on the issue.

[WorthyLoverOfExistence]

I once heard the idea (I think it was on a tape lecture) that you should try to view a child's allowance just like you'd view a small book or a box of crayons. It's a didactic device to help them learn - in this case, about money.

You therefor don't withold it from them if they fail to do their chores or as a punishment for some misbehavior. This is a difficult attitude sometimes, but I've found that to the extent I can do it - treat their allowance as something they always get and find other ways to discipline - they develop a healthy respect for money, saving, etc.

[softwareNerd]

The first time we introduced an idea similar to an allowance it was more like a budget than an allowance. Our son was probably about 6 years old at the time, and we decided that the way to reduce the weekly requests for toys etc., was to introduce the idea of a "monthly toy". At first, there was no exact $ number but a rough range: "No, the Sodor Engine Shed is too expensive, you can get that for your birthday or for X'mas; you can have an engine if you like".

About a year into this -- with the practice and with newly acquired math skills -- we ended up settling on an exact dollar amount per month and he can save and "carry over" any balances. Everything else remained ad hoc...money on request.

Now, at 8 years old, we're beginning to think that we should introduce a budget or allowance for certain other things. For instance, during summer-camp, the kids often go on a field trip and are allowed to take up to $5 along to spend. We found that our son would often give some money to his pals, and the usual explanation was that he spent what he wanted and didn't want to spend on anything else. Struck us that he viewed the cash as "to be spent on that trip, else wasted"; so why not make a friend happy. So, the last time he took cash I added on the instruction that he would end up keeping any that was left unspent...and he could use that just like his monthly allowance... to buy a video game, DVD, book, etc. This time, the little tike didn't spend a single cent! Next summer it probably makes sense to give him an allowance that he can spend on camp-trips or elsewhere.

In general, I don't like the idea of paying for chores, even an extra chore that might come up, if these are things that I expect him to do anyway. I like what Elle spoke of: special chores that the kid can volunteer for. Done right -- and at the right age -- that idea sounds goods. So, let's see... as the years roll by.

[RationalBiker]

We didn't really frame my son's income as allowance per se. Rather, my son's "job" was to do some things around the house and to be a good student. In exchange, we paid him for doing his job.

At the start of this summer, he got his first real job bagging at the local Harris Teeter. It's really quite a decent job for his first one. That made more concrete the value of money to him. He's making 6.50 an hour at the grocery store, having to pull 6 and 8 hour shifts. Now when my father asks him to take help him with some stuff around his house for 20 bucks, he jumps on it in a heart beat because it usually takes less than an hour to complete and it's not difficult labor. Before then he would balk a bit then do it anyway.

He's still doing his other "job" well. He finished his junior year with a 3.5 GPA. His SATS are 580 (Crit Read), 690 (Math), and 660 (Writing). He has his heart set on VA Tech but isn't quite sure what he wants to major in yet.