Dollars and Sense:
Making the Most of Kids’ Weekly Allowance
Many parents choose to give their kids an “allowance” of money on a weekly basis. In some families, kids must complete a predetermined set of chores or tasks to receive this money. In others, kids may be given the weekly stipend with no strings attached. There are reasonable justifications for either approach, but consider these questions: which one aligns best with your reasons for giving the allowance? And what are the lessons and values you want to teach your child as a family?
Weekly pay for doing chores:
Parents who use allowance to pay their children for chores argue that doing so instills in them the value of hard work. Showing you can’t get something for nothing is a potential deterrent from the dreaded millennial entitlement syndrome. Besides, let’s be honest: tying money to chores means kids are more likely to complete the chores, which helps you as a parent keep up with the never-ending mountain of household tasks.
But there are downsides to this approach which must be considered. Rather than doing chores in order to contribute to the household or help out a family member, these kids may only be doing it for the money. They could be missing the valuable lesson of what it means to do their part. You intend to teach them that you can’t get something for nothing. But you’re also unintentionally teaching that you can’t give something for nothing. This underlying message is contrary to the values and beliefs of most families. Chore-paying parents may feel that they are reducing the potential for kids to feel entitled. But they may be inadvertently doing the opposite: every time a child completes a chore, should he/she expect to be paid for it?
Families who offer their children a weekly allowance independent of chores may be doing so simply because they want their children to have some pocket money without constantly having to ask or negotiate. Wise parents will also use this allowance as an opportunity to teach some financial responsibility. Kids with a finite amount of cash in hand have to make choices about how to spend it. This gives kids experience in prioritizing needs and wants, and knowing when to be thrifty and when to splurge. But giving your child a weekly stipend of money can teach them even more than just budgeting principles. In his bestselling novel, The Opposite of Spoiled, New York Times personal finance columnist Ron Lieber suggests teaching kids to divide their funds into thirds: spending, saving, and giving. Money, therefore, can be a tool for imparting family values and life lessons to your child.
Whichever approach you choose, do so thoughtfully. Consider the intentional and unintentional consequences of your approach, and never miss out on a teachable moment.