Raising Responsible Kids: Allowances


We’ve been giving the bigger kids small allowances for a few years without much of a strategy.  We would often forget and have to catch up after several weeks, and while the intent was for the kids to give to the church out of their allowances, I admit that we usually dug around in our wallets as the offering plate started around and pulled out one of our own dollars for the kids to toss in.

We have recently refined our approach to allowances, and we started including our youngest in the process.  Of course, at four, she has no concept of money.  If she were our oldest, we wouldn’t have started with allowances this young, but she wanted to be included so we agreed.  She only gets a dollar a week, but does she ever feel like she has arrived, what with her little princess wallet and her weekly allowance.

She has been diligently collecting her dollar every week, and each allowance day she gets out her wallet and takes out all of the money inside and sits on the floor and counts her dollars.  She can tell you at any given time how many dollars are in her wallet.

Yesterday when we were leaving the house to run a few errands, she asked if she could buy a toy with her six dollars.  And I can tell you one thing for certain, you’ve never heard anything so cute as her little preschooler’s voice saying with pride, “my six dollars.”

I told her she could bring her wallet along and we would see what we could find.  I decided to take her to Five Below (a store where everything is, you guessed it, five dollars or less) so that she could easily find something within her price range.

After perusing the aisles and picking up and discarding about 10 options, she finally landed upon a squishy, spiky, plastic ball for $4.

At that moment, the rain stopped, the clouds parted, the sun shone, and the angels sang.

THIS was the toy she had been waiting for all her life.  Or, at least, one worthy of her precious six dollars.

We marched up to the counter and paid the clerk and left with her newest prized possession and two dollars left in her princess wallet.

She was delighted to show off her new ball to everyone who would listen for the rest of the day, although I’m sure the novelty will wear off quickly.  Yes, it’s another piece of junk that will end up in the garbage.  But she had her first experience with saving money and finding something she wanted to buy and paying with her own “dollars.”  Over time, she will begin to understand the value of a dollar.

Is it necessary to start this young?  No.  But kids also deserve more credit than they are usually given in this day and age.  When my grandfather was six, he had his own pony to take care of.  Kids CAN learn the value of money and responsibility when they are young, if they are allowed to do so.

* * *

What’s the Point?

The purpose of giving a child an allowance is to teach them money management.  It’s common to hear adults bemoaning the fact that their kids have an entitlement complex and don’t appreciate what they have.  I, myself, have been guilty of this sentiment concerning my own children.  Kids don’t take care of their things simply because they have too much and they’re given everything they ask for on a silver platter.  All too often, they haven’t learned to work for anything.  So we have changed how we run things around here, hoping to teach our kids responsibility and appreciation for the value of things.

How it Works

1. Allowances are tied to housework or chores. We do chores because we are part of the family.  No one pays me to do laundry or make dinner.  Likewise, the kids don’t get paid for doing their routine chores.  They can, however, earn money for doing extra chores.  For example, we paid my 7-year-old a few dollars to help us in the yard on Saturday while her siblings played with their friends and earned nothing.  This, however, was in addition to her allowance.

2. Allowances are age appropriate. My kids each get a different amount, based on their ages.  Figure out what you are spending on unnecessary toys and novelties and go from there.  It’s probably wise to provide them with a little LESS than you generally spend on them, so they learn that they can’t have everything they want.  They will learn to prioritize and save up for the things they really want.

I buy my kids everything they need, and then if they want candy, gum, toys, video games, then they must save their allowances and buy it themselves.  As they get older, if they want a certain brand of clothing, then they will have to pay the difference between what it is that they want and the acceptable alternative that I would have purchased for them.  I haven’t gotten there yet, though.

I’m not spending more money than I did before. I am just putting the responsibility on them to decide how they spend their discretionary income.  I was never one to buy my kids a lot of toys for no occasion, but now I don’t so much as buy them a pack of gum.  They have to use their allowance. And that is key. You can’t expect them to learn the value of a dollar if you buy them everything they ask for.  Then the allowance is meaningless.

3. Allowances are the child’s to spend freely, but with parental oversight.

Love And Logic suggests letting them have free reign over their money and letting them learn the hard way.

Rosemond takes the philosophy that the allowance is not their money, but rather, it is ours, and we are allowing them to use it to teach them how to spend wisely.  I prefer this philosophy, frankly, and that is the approach I take.

Therefore, when my son begged to use “his money” to buy a treat from the ice cream truck last week, I informed him that it is “my money” that he has in his possession, and no, we were not doing the ice cream truck that day.

I try to let them to spend their allowance how they want, within reason.  I do guide them somewhat, but the only way they will learn is for them to make mistakes.  Basically I have veto power, but I allow them a lot of rope.

We also don’t make them divide it up into giving and saving and investing and all that jazz.  We do teach them to give 10% to the church on Sundays, but beyond that, their allowance is meant to be spent, or perhaps a better word is managed.  Of course, they will learn to save up for bigger items, but we don’t put any specific portion into the bank.  When they get checks from relatives for holidays, those go into their bank accounts, and once over the past couple of years, my son collect enough allowance that he decided to put some into the bank.  Which was probably a clue that he was getting too much allowance, or, more likely, that we were still buying him too many incidentals.  As I said above, we have refined our allowance system, and it seems to be more useful now.

But back to the point — the point isn’t to save for college.  The point is to learn how to spend and save and manage money on a daily basis.

* * *

Here’s a real life example where I did let my son make his own decision about how he spent his money, even though I had a strong opinion on the matter.  I’m so glad I did.

A few weeks ago, my son had saved up enough to buy a video game.  We went to Game Stop, his wallet in his pocket, to look around.  It didn’t take him long to find what he wanted — the newest Pokemon game for his DS.

We went to the counter to make the purchase, and they guy behind the counter asked him if he wanted to reserve the new Pokemon manual coming out in a few weeks.  I looked over at my son, giving him the opportunity to make this decision for himself.

The store clerk got right down on my son’s 10-year-old level and explained with great enthusiasm that this book held all the keys to the Pokemon games, that it would give him all kinds of information, and all he had to do to reserve it was to pay $5 today and then when he came to pick it up, it would be $15, and that was 20% off the retail price.  This guy was a born salesman, and my son is 10.  I was pretty sure he was going to fall for it hook, line, and sinker.

My momma bear instincts wanted to say a chilly no-thank-you and walk out without the game or the reservation for this fabulous Pokemon resource.  I rather resented the hard sell, but then again, I suppose I did open the door for him.  Instead of intervening, I just stood there and looked inquisitively at my son, feigning nonchalance, to see what he would say.

“So,” the clerk wrapped up.  “You wanna do it?”

My son contemplated for a second and then shook his head and said, “Nah.  20 bucks is a lot of money.”

I couldn’t have been prouder.  And between you and me?  I thought he was going to reserve the book.  I was so relieved when he did not.  He had $20 left in his wallet, so technically he could have afforded it.  And incidentally, if he had decided to reserve it, I would have had him set that money aside and save it so he had it when the book came in.  Although first I might have asked him a few leading questions, to get him to think carefully about spending that much money.  Fortunately, he made the wise decision on his own.

* * *

As an aside, I keep their wallets for them. I don’t trust them to not lose them, and I fear that if they are in their rooms, a friend might be tempted to borrow something and not return it.  It’s just easier if I hold onto them, and they ask for them when they want to buy something.  It also helps me keep tabs on what they are spending as they get older and have more freedom.

I should also add, this is by no means the end all be all to allowances.  This is what we’re doing based on the few books we’ve read that address the topic; I’m sure there is room for tweaking.  I’ll keep you updated if we change anything major.

Do you do allowances?  How does it work in your house?

See all posts in this Raising Responsible Kids series.

Disclaimer: I am by NO MEANS a parenting expert of any sort.  I am just sharing some things I’m learning as I navigate the muddy waters of motherhood.  I figure, if they work for me, they may work for someone else.  Good luck!

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