How to Start Giving an Allowance (Hint: No Chores are Involved)

How to Start Giving an Allowance

Do you ever get sick of your child begging you to buy them something at the store? Do you want to stop being the bad guy who always says “no”? Do you feel like your kids don’t appreciate things you DO buy for them? Do you want your kids to learn how to spend their money wisely, and save for big purchases?

Then it might be time to give your kids an allowance. Not sure how to begin or what to do? Then I’ve got some tips for you.

WHY START AN ALLOWANCE?

Kids need to learn the value of money. Granted, it may take them a while, but having their own money to save and spend is the first step. When you are in charge of what they can and can’t have, kids have no understanding of how quickly money can be used up, or how long it took to get the money in the first place. Having an allowance also allows you to set some boundaries about what you’re responsible for. Parents, for example, are responsible for food, shelter, clothing, supplies for school…things kids NEED. Other things – toys, trips, treats – are free to be bought as a parent sees fit. Your children stop seeing you an endless bank of money, and start learning to prioritize their own needs and wants.

WHEN SHOULD I START AN ALLOWANCE?

You can start an allowance at any time, but I think most children have a decent understanding of money around the time they start school. They may not be able to add up money on their own, or know each individual coin, but they probably understand that money = buying something at the store. If you try to implement an allowance for your five year old, and they just don’t seem interested, it’s fine to wait and try again later. There is no prescribed age at which to begin. It’s really just a matter of knowing your individual children and what they are ready for. We started an allowance last year, when our children were 12, 7, and 5. (We have a blended family, so an allowance was new for all of them.)

HOW MUCH SHOULD MY CHILDREN GET?

This, again, is dependent on various factors. How much can you afford to set aside each month for allowance? How much do you feel comfortable giving? What do you expect your children to use an allowance for?

If you have a teenager and are expecting them to use their allowance for outings with friends, or extra clothes, it only makes sense to give them a larger amount each month. If you have small children, and are expecting them to pay for treats at the store, or toys they are dying to have, you might not give them very much. If you want them to set aside portions of their allowance for spending/saving/giving each month, it might make sense to add a little more money than if their allowance were spending money only.

In our family, we give $1 for each year of age, every week. So, our 6-year-old gets $24 per month. Our 13-year-old spends half the month at her mother’s house, so she only receives an allowance while she’s with us. If she spent all her time with us, she would get an allowance every week just like her younger step-sisters. Yes, that would be $52 each month just for her, but if that sounds like a lot, try adding up what you spend on clothes, snacks or treats, movies, and other odds-and-ends for your teen. I would imagine that you are already spending a similar amount (or more). By giving her a reasonable allowance, we’re no longer the “bad guys” when we say no to something at the store. She is free to choose her own “extras” and she’s learning how to make decisions about how badly she wants something.

WHAT SHOULD THEY DO FOR AN ALLOWANCE? 

Nothing. Yep, they should get an allowance for doing nothing at all.

An allowance is not a way to “keep your child in check” or “punish them.” An allowance is a tool for teaching your children about money. You’re probably already spending the same amount of money on your child each month, and I would guess that you’re also having a lot of arguments about what you “should” or “shouldn’t” buy for them. Giving your child an allowance – regardless of their behavior that week – gives your child more responsibility than you shouldering all of it yourself.

Why should your child learn to save for an item when their allowance could be taken away for a mistake, or an inability to control their emotional responses? Give them their allowance to help them learn the value of money, and how to be responsible for when and what they buy. Use other things (like natural consequences) for discipline.

Now, I’m not saying that children shouldn’t have chores. They should! But chores should be a natural part of being a family – not something done in order to get a reward.

WHAT IF THEY BLOW ALL THEIR MONEY?

If your child blows all their money at the beginning of the week/month, and come to you begging and crying when they want to buy something, it’s a wonderful learning opportunity. Validate your child’s feelings – “Yes, I’m sure you’re upset because all of your money is already gone and you can’t get what you want” – and maybe offer a story of your own about when you wanted something you couldn’t buy. Offer to help your child save money the next time they receive their allowance, or even offer extra “jobs” around the house if your child would like to work for extra money. Extra jobs should not be regularly expected chores, but a way in which your child can do something they wouldn’t normally be expected to do. Remember, this is a teaching opportunity. Your child isn’t going to get it right every time.

A FEW MORE POINTERS

  • Don’t control what your child buys unless it harms their physical/emotional health.
    • Think the toy is cheap and waste of money? Let them learn that lesson.
    • Think they’ve had enough sugar that day? You can still let them buy their own treats, but you can also control when they eat them at home.
    • Giving an allowance gives you freedom – you don’t have control what they do and don’t buy. Let them make bad decisions, because the lesson is more valuable to them when they are responsible for their own choices.
  • After an amount is decided on, be very clear about what their allowance should pay for.
    • Will you expect them to buy treats and toys?
    • Will their money be used for extra clothes? Or going out with friends?
  • Encourage them to bring their money when going out (you can hold on to it for them if you are worried about them losing it).
    • If they (and you!) forget, it’s okay to offer to buy them something as long as they pay you back when returning home. I’ve done this a couple of times for my kids, and it earns me extra mom points (and I’m not out any money).
  • Don’t criticize mistakes they make with their money (buying a cheap toy, spending all their money), but remind them that they are in charge of their money and can make a different decision next time.
    • “You didn’t bring your money to the store, and that’s not on my list of things to buy today. Try to remember to bring your money next time, and you can buy it when we come back.”
    • I’m sorry your toy broke, and I know you’re upset. Sometimes, toys that don’t cost much money aren’t made very well.”

After a year of allowance, my kids are learning some things. When we browse the toy aisles at Target, I see them checking prices. I hear them say things like, “$20?! That’s so expensive!” and also, “I’m going to save up my money to buy x/y/z.” They still make lousy decisions at times (so do I, actually!), but we hardly have any arguments anymore about what I should and shouldn’t buy them. The freedom, for them AND me, is wonderful. 

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