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Kids' Allowances: Giving vs. Earning
Kids' Allowances: Giving vs. Earning
07/10/2012
When it comes to the issue of whether or not to give kids an allowance, there are two schools of thought.

The first school of thought says a child's allowance should be associated with work:
"The only way you get money is to earn it; there is no entitlement program in life.  If kids have to work for their money, they also will start to understand and hopefully appreciate how hard it is to work and earn money.  There may even be a miracle that takes place, and they will start to understand that Mom and Dad have to work hard for their money as well!"
Up until recently, the American ethic has always been that the only way you get money is to earn it (of course, in reality it's not always that way - anyone keeping up with the Federal government bailouts?).  Even though Cinderella didn't get an allowance, she still ended up with a prince, the castle, and a very uncomfortable glass slipper. 

The second school of thought advocates for parents to divide chores into two categories: family chores and extra chores

Family chores are chores children have to do because they are members of the family.  They don't get paid for them; their reward is an internal sense of accomplishment that helps them develop a work ethic.   
  
Parents can also create a list of extra chores children can do to earn money.  Extra chores will teach your child to appreciate hard work and understand that earning money involves work.

For example, your children shouldn't get paid for brushing their teeth, keeping their own space clean, or putting their toys away.  If you child doesn't brush his or her teeth or clean up, you take away a privilege like watching TV.  But all chores in the home, like setting tables and doing laundry, are paid for with a salary on a weekly schedule.  If work-for-pay jobs are not done, then there's just no pay.

Here's what I think:

I really don't see a huge difference between the two schools.  I think an extremely modest allowance should be given based on your child's age.  It should be just enough to pay for little small things, nothing major.   For example, they can't go out and buy a new pair of cool shoes.  You should also expect them to do minor chores for their allowance, such as keeping themselves and their room neat.  Everything else they can earn by doing major chores such as setting and clearing the table, or dealing with the garbage, dogs, and/or yard.  I don't think you should withhold allowance because they didn't do something or annoyed you.  I don't think money should be associated with that. 

For the major chores, create a list with a price tag attached to each chore.  You can even post it somewhere in the house.  The list specifies what things they can do and what they earn for having done them, just like a restaurant menu shows what a particular meal costs.  If they want to make extra money, those are the chores they have to do.  That way they earn their way.  If they don't earn the extra money, and then say they want to go to some event and don't have enough money, you just tell them that they need to think ahead the next time.  It teaches them a powerful lesson.  If you just give them the money, it teaches them no lesson.  Instead, they'll just think they're entitled, and they'll be on their way to buying things they can't afford.

In addition, tell them whatever they earn will have to go into a bank account, some of it will have to go to charity, and the rest they can keep, save, or spend.  Putting money in the bank teaches them to save.  Tell them they can't touch the money unless there's something huge taking place (e.g. when they're 15 and want to go on a special school trip, they can pull money out with the understanding they won't have it for the future).  The amount given to charity teaches them to be generous. 

By following these steps, you will teach your kids to budget and manage their money, and control their need for instant gratification.
Tags: Budget, Finances, Parenting, Personal Responsibility, Work ethic
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