Cute little girl with paper money - dollars

To Allow or Not Allow

When it comes to how to start teaching our children money management, the obvious choice and response from many of my clients are:  “Well, I give them an allowance?”

Do you give your kids an allowance?  Are there any conditions to the allowance or is it an entitlement?

Many Methods

I don’t know the “right” answer and but, I do know there are many views out there on how to give your children access to funds.

  • Kids are “given” a weekly allowance – could be viewed an entitlement. If you “dock” allowance, it is viewed as a punishment.
  • Children are presented with a chore list and compensated on a “commission” basis – could turn into a “I’m not doing anything without being paid for it.”
  • Outline a job description and determine if the position is paid hourly or salaried with job reviews to adjust performance and/or pay. May be open to inherent issues if the job is ill-defined.
  • A combination of any of these methods.
  • Do nothing, but continue to control and/or handle all money for you kids.

When establishing a method to allow your children access to money, it is critical to assure they are conscious of the primary objective when considering a plan.

Planning to Fail

Unfortunately, I have seen parents devastate the process right out of the gate.  They put in a system to “compensate” their children and are immediately on a witch-hunt to look for opportunities to discount the pay system and find fault with their child’s performance.  This only sets the kid(s) up for failure and does not set the intention and energy in the right alignment for the children to learn the proper skills in money management.

So, what is the right answer?  It depends.

There is no “right” answer for everyone and/or for every child.  So, the clique answer is, “It depends.”

Collaboration is Critical

When you decide it is time to make a decision on getting your kids some funds, first, before the kids know anything, ask yourself, “What are the goals and desired outcomes for the process?”  Ensure you and your partner are in total agreement and have determined consequences you are willing to enforce or determine grace ranges you will be willing to tolerate. (Don’t allow an opportunity for your kid(s) to pin one parent against the other.)

By signing in below, you will receive a sample “allowance” contract.

Leave a comment below on challenges you face when implementing a pay system for your children.

10 Comments

  • Penny

    Reply Reply 10/03/2014

    I only pay my children for helping me with my chores. They do their own because they are part of the family. They are also required to tithe and save a portion of it as well.
    Penny recently posted…31 Days of Homeschooling Using Disney Parks : Literature SelectionsMy Profile

    • Renae

      Reply Reply 10/03/2014

      As you pay your children, think about the obligations/wants they need to manage to “pay” for as they begin to learn money management skills. There is definitely not a perfect answer — however, consistency tends to play a critical component in the process. Wishing you all the best! 🙂

  • NappyBella

    Reply Reply 10/03/2014

    Hi there, here from UBC.. I liked this and would definitely need this information for my son. He’s still a baby so I have some time:) Look forward to reading from you again
    NappyBella recently posted…To my SON!My Profile

    • Renae

      Reply Reply 10/03/2014

      Time goes too fast, so I would start to recommend thinking about the process that will work for you and starting the foundation. Good luck! <3

  • Hobby

    Reply Reply 10/03/2014

    Although I never gave my kids an allowance, I did hire them to help me with age appropriate jobs. I remember my daughter and her friend walking to the thrift store one day to buy “business women outfits” so they could have a pretend business like mine. My daughter was my paid assistant until she left for college.
    Hobby recently posted…Tasting the SacredMy Profile

    • Renae

      Reply Reply 10/03/2014

      Love the comment and what a cute idea of the girls “dressing” the part as they played. 🙂

  • Patricia

    Reply Reply 10/03/2014

    We don’t give our kids an allowance. We put $1 a week directly into their savings account. The only physical money my oldest gets is tooth fairy money which she puts into the piggy bank for events like funky friday at school or school bake sales.
    Patricia recently posted…Weekly Vlog Round Up – 26 September to 2 October 2014My Profile

    • Renae

      Reply Reply 10/03/2014

      Great way to start saving for your kids. Also, think about ways you will want to start teaching them to manage money. I cover some of this in previous blog posts. 🙂

  • Hi Renae,
    Wonderful post! I especially like that you recommend that we begin by asking ourselves “What are the goals and desired outcomes for the process?”. Somehow I think this is the proper way to start ANY project.
    Robbie Schlosser recently posted…Selecting Garden Party MusicMy Profile

    • Renae

      Reply Reply 10/03/2014

      Great point and often too overlooked! We should be asking what we desire to get the energy flowing with the outcome we desire before we become busy in the doing.

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