Family Forum: Discussing Children and Money

Lisa Maldonado March 30, 2011 at 06:57 pm

My ten year old has been receiving an allowance for about a year now, and we stopped allowance for our high school aged sons once they got a part time job. Although there are no daily chores for them to do, they know there are expectations for them to help out in the house when asked or needed (including doing their own laundry.) In general, our kids know that when it comes to necessities & school related expenses -- whether trips or supplies -- we will take care of that. However, when it comes to socializing, or buying video games or other toys, for the most part they need to use their own money. It's amazing how much they think about certain purchases when they know they have to open their own wallet!

Melissa Hin March 30, 2011 at 07:11 pm

I have 3 teenage boys and I have to say that we have approached the "money" issue in a variety of ways. We tried assigning chores and for a weekly allowance. I found that I was still asking the boys to complete the tasks more times than I would have liked. We later switched to providing a predetermined amount for each task completed. The latter worked better for us. Each child valued money differently. One was money motivated while the others were not. One couldn't keep his room clean if his life depended on it. One child couldnt spend his money fast enough whether it was our money or his own. What I did find helpful, bringing them shopping when groceries or other items needed to be bought. I taught them to research and shop for the best price. When they wanted items which I felt to be a luxury I told them that they could wait for a special holiday gift or purchase the item with their own money. Especially when they made the claim that they absolutely had to have it. If the item was something that they truly wanted I found that they were willing to work hard and save up the money to get it. If they chose not to purchase the item with their own money, they didn't really want it in the 1st place. Over the years they have all matured to respect the value of money whether it be my money or their own. They have their own bank accounts where they value their savings. My oldest son has been responsible with his credit so far. They are still learning and we are still teaching.

Rosetta Goddard March 30, 2011 at 07:36 pm

This is a subject I have been thinking about alot lately. My son is almost six and a half and I have been thinking about starting an allowance for some age appropriate chores. I received an allowance as a child, up until my teen years when I started earning my own money at a part-time job. I remember getting excited when I saved up enough money to buy something I really wanted. However I want him to do things around the house because it is part of helping out the family not just for the monetary satisfaction.

Lorraine March 30, 2011 at 07:45 pm

I have a few years before I have to worry about allowance, but I agree with Rosetta - that's a hard line to walk. I believe kids should help out around the house because they are part of the household - but I also got allowance for my chores and remember being really excited about earning money! I'm looking forward to hearing what other families do.

Rich Arleo (Editor) March 30, 2011 at 08:49 pm

When I was younger my allowance was like a roller coaster...my first allowance when I was about 10 was very small, then it slowly rose until I was more reliant on myself, then it went back down before eventually disappearing :) This was in addition to working on the truck with my father delivering Pirates Booty all around Long Island, and it certainly helped me understand the value of a dollar. I will likely instill a similar strategy with my kids in the future.

Marian Larson March 30, 2011 at 09:07 pm

Growing up as one of eight, none of us received an allowance. All eight of us had household responsibilities that my parents felt were obligations. We were able to earn money in my family by volunteering to do certain tasks that my parents didn't feel should be included under the 'household responsibilities', such as shining my dad's shoes, cleaning tile grout, washing the car, etc. Those of us who were motivated to earn money volunteered frequently for those extra chores. We were all encouraged to work from age 10, whether it was delivering newspapers, babysitting, shoveling neighbor's snow, etc. Again, those who were motivated earned money and those that weren't motivated, didn't earn much. Isn't that the way it is in the real world, too?! My husband and I have used this same approach with our own three children, who are now teenagers. Luckily, they are all motivated to earn money and work. Because they all show fiscal responsibility, we occasionally give them some money when they are going out, saying, "This movie (dinner, book, etc.) is our treat. " When we dropped our oldest back at college after the summer break, my husband attempted to give him some cash. Our son replied, "I don't need any money, Dad. I worked all summer and saved my money. Thanks anyway." That was music to our ears!

Lisa March 30, 2011 at 11:39 pm

We have never used an allowance with either of our sons. When our oldest was younger and now with our 11 year old, they had would have to do different things to help out- like take out the garbage, pick up their room, feed the dog but never for an allowance. We always have provided them with clothing, sneakers , sports equipment etc when needed. The extras like video games, and items that are not necessary, our boys save(d) their birthday money, or recycled bottles and cans money (whoever stands in front of the machine to do this gets the recycle money) to purchase these items. They also could earn a special item (video game, toy) within reason for doing something spectacular- like getting an award, or earning a great report card.
Our oldest (now 20) was luckily a hard worker and still is and always had a knack for finding odd jobs outside our home, since he was 12. He is a good saver now and pretty much uses his own money for all his necesseties. He is in college so we still give hime some money for gas and college related costs.. This type of system seemed to work for us.

Kristin Colvin March 31, 2011 at 01:42 am

Like Rosetta, our daughter is 6.5 years old and we have been contemplating an allowance system for her for some time. She has had her own bank account since she was a baby, and understands (age appropriately) how savings account work. She has also had a 529 Plan set up since I found out I was pregnant, but none of her money would ever be expected to contribute to that.
I happen to love Suze Orman myself, & agree with much of what she has to say about childhood "allowance." She says that we, as parents, should change the word to "salary," and that the work determines the salary. The payout should be small for young children, the chores kept simple & decided upon by all. As a teen, use the salary/chore conversation to introduce taxation. After all, we are trying to prepare our children for the real world. Suze also encourages real employment once your teen turns 15 or so. The salaried chores should be assigned monetary value & just like in the real world, children should not be allowed to jump to the higher paid chores before performing the more menial tasks. Personally, growing up I did not receive an allowance. I received money for my good grades, starting in elementary school (i.e., $10 for every "E" or "A", $5 for every "VG" or "B", etc). By high school, I had accrued quite the savings! I also started working at age 12, babysitting. I think one of the very best lessons we can teach our children is a financial one. It can only benefit them for a lifetime!

Cheryl Donnelly March 31, 2011 at 08:14 pm

My kids are young, but we have started an allowance with our oldest who is 5. I like Kristin's idea of calling it a salary, so the children understand that there is work involved. My husband is a CPA, and my oldest like his dad is really into "numbers". We are using the allowance right now as a way to also teach Kieran about the value of money and the concept of saving your money. Kieran enjoys saving his money to get something he really wants, like a new wii game.

valerie garritano March 31, 2011 at 11:11 pm

When our children were young, before the age of about 10, we did not bring money into the equation other than their birthday money. Money is important but we felt they should be of a responsible age to understand and manage it. My husband and I decided that there needed to be a sense of earning when it came to money so it would not be taken for granted or the importance of earning a buck diminished. We agreed that there were chores that were expected of our kids so we did not pay them for that...cleaning their rooms, cleaning up after dinner or helping in the house. These were the obligations of the house. However, when they wanted something, we took this opportunity to inform them they will be able to work for their own money soon, and we offered money for special projects around the house ...spring cleaning outside, painting the fence or shed, creating a garden.

valerie garritano March 31, 2011 at 11:12 pm

At age 12, all were eligible to work at my husband's office for a salary. We took them to the bank and opened their accounts together. Part went to their college education and part they could keep. At a later age, they were also taught quickbooks to manage their money and spending. We closely observed how each child managed their money and our teachings were directed accordingly...some kids saved everything and spent nothing, some spent everything and saved nothing. It was challenging sometimes, guiding their issues, waiting for them to get motivated to work and trying to motivate them positively without pressure...but it all turned out very well for each child.