Do you remember your first allowance? How old were you? Ten, eleven? Younger?
As I was researching today’s article, I ran into some startling revelations. Parents are now beginning to give their children allowances as early as six years of age. My only guess is that it all goes to candy, or to a piggy bank for future purchases.
It is a lot easier to mold the minds of the very young to understand money, earning money, and the rewards of savings.
But now the roles are reversed, we’re the grownups. You may find yourself wondering how to teach your children at any age about the responsibilities associated with money. There are
many issues involved.
There are lots of opinions on the subject, so I give you the summary of what everyone agrees on.
What do others do?
A 2012 survey conducted by the American Institute of Certified Public Accountants asked parents what they gave their children, by age and how and when they added extras to allowances.The average parent nowadays starts giving allowances to their children when they are about 8 years old. However, only 61% of parents give allowances, though that doesn’t mean that they don’t give their children money; they simply handle it differently, by either paying them for extra tasks, grades, work, or upon demand from their children to buy things or go out. Or a combination of all of those.
There is no right or wrong about how you handle it, as long as you teach your child the value of what they are getting.
How much to give?
The same study shows that the average allowance is 65 dollars a month. It varies based on the age of the child and the location. City children generally receive more as cost of living is higher.A good rule for starting might be to give a dollar a week for every year of your child’s age. This way, an 8 year old would get $8 a week, and a 14 year old would get $14.
Remember that there are discretionary expenses that you cannot expect your child to cover, such as electronics (phone, tablets, music players, etc.), contract monthly fees for those, and everyday clothing.
This doesn’t mean, however, that you should just agree to everything they ask for.
How often?
The younger the child, the more need for instant gratification. It is hard to make a nine-year old make his or her allowance last a month. Younger children can have a weekly allowance, and if you teach your child as she moves into her teens that she can save some of it to spend on more valuable things, over time, you can switch to twice a month allowances and then to monthly. If you stress the importance of how you value her patience and trust them to spend her money wisely, she should make few mistakes.But kids do make mistakes, and if they run out of money ahead of time, resist the temptation to bail them out, or give them an advance from their next allowance. If you help them, you’ll be showing them that likely you’ll help them in the future, and they will have learnt nothing.
Instead, ask that they write down on what they spent their money; technically they will be making a small budget, and explain to them that this way they can see exactly where their money is going. After a few times doing this, they will likely find a pattern emerging of where they are spending too much-too fast, and learn to correct it. Do not interfere or micromanage, and don’t look at their budgets unless they ask you for help.
A combined approach
I am not a defender of the straight allowance plus discretionary expenses upon request approach. I believe that there are good ways to teach children the value of money in a way that they feel doubly rewarded, in that they earn their money, and learn something.A good way to teach them is to have them work for some, not all, of their allowance. You can sit down with your teen and find out if they want to earn extra cash. Explain that you would be lowering their current pay to a certain amount (about 20% less of what you currently give them) in exchange for the chance to earn more than their current pay by making some type of extra efforts of their choice from a list you came up with.
There are many efforts to be rewarded, but you must be sure that he or she understands that these are not short-term but long term commitments. They would be getting more money over time, but the moment they slack, you will either dock their pay or go back to regular allowance terms. This means, they’d be “fired” if they do not do the work they’d committed to do.
By the same token, remember that your child would also need paid “vacation” from these tasks for specific things: midterms and final exams are an example of mandatory time-outs (unless you are rewarding them for better grades, read later on about that!). Also, if they cannot do their tasks when they are sick, you should not take their payment away. Think of it as sick leave; yet, as “boss” remember to allow only so many sick calls per season! Nip the tummy aches in the bud!
How much should they work, and how much should I pay?
Think of how much of your teen’s time (per week) would be taken up by the tasks they want to tackle, and let them work on those no more than 6 hours a week on any combination of them. They need time for themselves, too. Also, if the task they choose is something they have not tried doing before, ask them for a training test, teach them, and allow a short probation period to make sure it is something that they can and want to do, and something that you feel comfortable letting them do. Not every task is suited to every person.Pay them by the hour or finished task, as you two agree. Pay them fairly, as some things cost a lot more if you hire a contractor, but do not pay contractor prices. If your kid complains, explain that contractor salaries cover their transportation, meals, gear, and possibly materials. Your child isn’t paying for those.
1. Chores
No, you should not pay your teen for taking out the trash, tidying the dishes or cleaning his room. Those are daily home management items, and everyone needs to do his or her own part.
There are many other larger tasks that they can be paid for: vacuuming the whole house once a week, floors and furniture, or dusting all the common areas in the house twice weekly are good examples.
There are also seasonal tasks that you can agree on: washing your car in and out once a month.
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Cutting the grass, raking the leaves, and shoveling snow are also good seasonal jobs for a young person to handle.
Other odd but fun ideas that you could offer payment for helping you with are: seasonal cleanings, like kitchen cleaning projects or Spring Cleaning; cash for wrapping each present during the holidays; window-washing.
2. Babysitting of siblings
Many parents immediately say no to paying their older children for babysitting their own younger siblings.
I disagree. There are two kinds of babysitting: when your teens stay home with their siblings while you run errands or need to be out, they should not be paid. However, if you’re out for your own entertainment, and would pay a sitter if your child wasn’t there, then it’s only fair to pay them instead. Also, if you need them to stay home when they normally go out, on Friday evenings or weekends, you should consider rewarding them
for it.
3. Grades
There is a great debate over whether a child should be rewarded for better grades. Some parents say that children must understand the value of what they are learning, and should expect not reward. This is true. However, it is also true that putting in extra work leads to better grades; and extra efforts are always good to reward.
It is up to you whether this is a criterion worthy of money in exchange for work. But if you do, remember that it is not right to pay for passing or barely better work. Only top or next-to-top marks should be rewarded: that is, the top two possible scores.
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