There are many different ways that parents let their children share in the
family’s resources. Children receive money through allowances received from
parents, by earning it, when they receive gifts from others and when they ask
for it because they have a special need. Each approach to providing children
with money has certain advantages and disadvantages. Giving your child a
regular and specific allowance can be a very effective way to teach a child
responsibility, can provide a child with the opportunity to learn effective
money management skills, allows the child to learn to plan ahead, and promotes
a sense of personal control. Allowing your child to earn money for completion
of household tasks and chores can also teach children responsibility but has
the disadvantage that children may lose interest in completing chores when
they don’t feel the immediate need for money. Simply giving children money
when they need it allows the parent to retain control over the child’s money
but also has many obvious disadvantages. Oftentimes, children who are given
money as they need it fail to plan ahead and tend to become more focused on
influencing their parents rather than budgeting for their expenses.
Some approaches
to allowance-giving can be more effective than others. Typically, it is
important to separate the giving of allowances from the expectation that
children complete certain household chores and duties. In this approach, the
child is given a regular allowance because they are a member of the family and
deserve to have a share of the family resources. Similarly, the child is given
chores and duties because, as a member of the family, they are expected to
make contribution to the family’s welfare. They are not paid for completion of
chores and duties, however, just as the parents are not paid for their efforts
around the home. (It is important for children to be given regular chores and
duties, but they should be held accountable for these duties separately from
the allowance that the receive.)
There are some key elements to this approach. First, the allowance should be
given with no strings attached. The child should be free to do what he or she
wishes with the money that he or she is given. To learn to be responsible
spenders, children need to have the opportunity to make a few mistakes and to
learn from these mistakes. Remember that the purpose of allowance-giving is to
create learning opportunities and to teach responsibility, not just to give
children money to spend. Second, children should be given responsibility for
certain personal expenses that the money they are given will cover. For
example, a young child might be given a certain amount of money as an
allowance but also told that he or she is to use that money to cover the
expense of any snacks that they might wish to purchase from local stores as
they might desire them. Adolescents might be given another amount of money as
an allowance but told their entertainment money should come out of that
allowance. Third, the allowance given to a child should be a fixed amount and
children should never, ever, be given an extra amount of money when they have
used up what they have been given. Children learn self-control and
self-restraint by experiencing limits; if they are given extra money when
their allowance runs out they will not have any reason to plan ahead or to
discipline themselves in their use of money.
At what age
should allowances start?
Typically, children begin to display an interest in and need for money by the
first grade. Prior to that time, most children do not have a sufficient
understanding of the function of money to benefit from a regular allowance.
How much should
be given in allowance?
The amount of money a child might receive in allowance may vary considerably
from child to child. A number of factors determine what an appropriate
allowance might be for any individual child. First, the child should be given
an allowance that is somewhat consistent with the amount of allowance that
their peers are receiving. Second, an allowance should be given that is in
line with what the family can afford. Third, because you would expect
(especially at first) that a child will make mistakes and squander some of the
money given to them, the amount of allowance given should be no more than the
parents are comfortable letting the child squander. Fourth, the amount of
allowance given depends on the kinds of responsibilities that the parent will
attach to the allowance. For example, for an adolescent who is told that she
will be responsible for all of her entertainment expense, an allowance of
$10.00 a week may or may not be sufficient to cover those expenses. Parents
still need to provide for the child’s basic necessities; the child is given
responsibility for some of the “extras.” If the parent feels the need to
retain control over certain expenditures then the parent should retain the
responsibility of paying for them and they should not be given to the child.
One way to determine what might be an appropriate allowance is to consider
what you are already giving the child from week to week. You are probably
better off giving the child in one lump sum what you are already giving them
(in response to their requests) over the course of the week or month. It is
important to remember that children who have too little money to spend tend to
spend the money they do have more impulsively and thoughtlessly and have
difficulty thinking of any long-term goals that they may have for their money.
Additionally, children who have too little money may end up feeling deprived.
On the other hand, children who have too much money tend to lose appreciation
of the value of money and tend to spend it recklessly as well. Obviously, the
amount of money that a child receives as they grow older will need to change
as their needs change and as responsibility for certain expenses that their
parents have given them change.
How often should
an allowance be given?
Allowances should be given regularly and predictably, more frequently for
younger children and less frequently for older children. For first graders, it
might be useful to give allowances twice a week. For adolescents, it might be
useful to give allowances as infrequently as once a month. It is extremely
important for parents to be consistent. Everyone involved should clearly
understand the amount of the allowance, the specific day that the child will
receive it, and the responsibilities that it will cover. As was mentioned
above, it is important that there should be no advances on a child’s
allowance.
Parents often
wonder if a plan for savings should be built into allowance-giving. It
probably is useful for parents to create opportunities for children to save
money (such as giving a “piggy bank” to a younger child or opening a savings
account for an older child) but it is probably not helpful to require savings
of a younger child. It is no benefit at all (in teaching responsibility) for a
parent to save money for the child.
Finally, it is important to remember that money
is typically not very effective as a reward for good behavior. Positive
behavior (such as earning good grades) can be rewarded in other ways. Also, if
children are paid for such things as earning good grades or helping with
household chores, they lose appreciation for good behavior for its own sake
and may come to believe that they should be paid for good behavior.
Pauquette
