Should you pay for chores?
Is allowance a good idea?
I think money is a fascinating topic. How we perceive and judge money, wealth and prosperity speaks volumes to how we ourselves were raised and what values we hold. Do we cultivate abundance or scarcity? Do we approach it from love or fear? Do we trust that the universe is “on our side” or do we feel we never get our “fair share”? Do we give generously to others? Do we think of money as “dirty”? Do we begrudge the wealth that others accumulate, or believe we can easily generate our own fortunes?
There are no “right” answers here. But as deliberate parents, it’s fitting for us to cultivate intentionality when it comes to the financial legacy we bestow upon our children, lest we subconsciously arm them with a fear of success (or failure) that inhibits their capacity for financial freedom and security.
I love Ron Liebler’s book on this subject, The Opposite of Spoiled, because it holds within it both the practical “how to” and the theoretical “why to” when it comes to educating kids about money. I’m sure many parents share in my fear of my children being “spoiled”, a fear that, in and of itself, is usually reserved for the privileged few who might even have this problem to begin with (hungry children aren’t spoiled #firstworldproblem).
Liebler teaches us that if we want to help our children come into responsible, ethical, creative and entrepreneurial approaches to money, an allowance is a key tool in developing these skills. I think that if your neighborhood and community can offer children enough opportunity to earn their own money, then a steady allowance is not necessary. They can learn all the lessons about saving, spending and giving from a real market experience of offering goods and services in exchange for cash… wonderful. Unfortunately these opportunities seem to be dwindling, particularly in the USA, where children’s independence is aggressively cut off to “protect” them from a myriad of imagined dangers. I know, being able to give children money is a privilege many don’t have. And some of us who can and choose to can be shamed or blamed for raising kids who think they should get a paycheck for doing nothing. But here’s the thing, this is spending money on teaching money.
So, if you are open to starting a steady allowance (and you could start as early as your child shows interest in money)…
Here are some things to consider:
- A large part of getting an allowance is creating the opportunity to make tough choices. When I have a fixed amount of money coming in (as most of us do) I need to learn to choose between things I want. Do I want the comic book or the fidget spinner? Or to save up for that Star Wars set? The idea is to give children enough money to buy some of the things they want, some of the time, but not so much that they don’t have to wait, save and earn. Thus learning delayed gratification. Remember: start low and build up slow. You could start with something like $1/ year of age (we do less than that. My almost 6 year old gets $3/week currently).
- An allowance and managing money is an awesome way to access real life math skills. Figuring out how many quarters make up the dollar, how much change I should get from the shopkeeper, and how I’ll need to budget for the gift I want to buy my friend (plus tax) makes math real, applicable and relevant (*ahem* unlike in a textbook).
- One of the things we want to model through giving an allowance is commitment, responsibility and consistency… values I’m sure we all want our children to display in the work that they do. That’s why the actual giving of the allowance should embody these. Setting a clear and consistent dollar amount and linking it to a ritual each week that you commit to – without fail – shows that you are “showing up” and taking it seriously, and so should they.
- Use transparent money jars, in contrast to the age-old piggy bank. This format is accessible, manageable and transparent just like money itself. We want to send the message that kids can and should manage their own money, see it accumulate, and get the visual representation of it being empty when they spend it all.
- One of Liebler’s fantastic pieces of advice is to create Save, Spend, Give jars (you could add invest for older children). This means that whatever their weekly allowance, they divide it up… Some to save for something (best if it’s something specific. You could print out a picture of what they’re saving for and stick it to the jar to help keep focus on the goal). Some to spend now (impulse buys aren’t to be shamed but rather planned for “If you have enough spending money in your jar you can buy those stickers, sure.” If not, not.) And give. I love the addition that giving money to those in need is built in to the allowance system.
- Incentivize saving and giving. One of the suggestions in the book is that (for older children) parents can create a scheme that offers to match whatever money the child puts into saving or charity, thereby encouraging long term saving and giving.
- Do NOT link chores to allowance (I think this one is really important.) Chores such as cleaning ones room, feeding the dog, taking out the trash, sweeping the floor, setting the table, cooking, laundry etc., are just the basic tenets of self care and being part of a family and a home. Just as you and I do not get paid for these, neither should our children. It sends an entirely corrupt message that they are doing something very special when they help out. They’re not. Children from the age of 1 or 2 should be expected to help in whatever way they can (and we as parents need to slow down enough to let them “help”).An allowance is simply a tool to learn about money – it shouldn’t be something lorded over children as a reward or a punishment. Never take it away because they were “naughty”, and never offer to pay for them being “good” or “helpful”. Their behavior and contribution to the family should be on an entirely different and unrelated axis.
If, however, you have some special “jobs” that you would otherwise be outsourcing and you want to use them as an opportunity to offer your children the chance to earn some money, that’s great. Perhaps mowing the lawn or cleaning the car are good examples (although if these are your regular expectations of household chores, then so be it! Do not pay for them). My 5 year old, frustrated that he couldn’t earn money easily, asked if I had a job to pay him for, and so we used cleaning the car as a job I would pay him for. When he gets a bit older I will not pay him for this, because I hope he’ll have more options for making money elsewhere.
- Continually discuss money and value. There are some issues we feel uncomfortable about as parents, and so we adopt a mute/deaf approach. Race, gender, money… to name a few. But in all these areas there’s one thing history has taught us: speaking directly about the topic is far more beneficial to our children than ignoring it and hoping it “works out”. Discuss with your child what it takes to earn and save money. How much it costs to live, eat, have a home, go to school. Demystifying money, value and spending, and creating an open, honest dialogue about it will go a long way to setting your child up for a life of prosperity and financial health.