A lot of us parents wonder should I give my kids an allowance? If so, how much? Do you tie it to chores? This post is an explanation as to how we do an allowance and why in order to give you a glimpse into how we handle our kids and money. Like a lot of parenthood, we’re just winging it, but after giving our son and daughter an allowance for a few years, we feel like we’ve found something that really works for us.
How Much We Give and Why
Both of our children, who are aged seven and eleven, get an allowance and the amount they receive is determined by their age. They get $1 for every year they are old, so our oldest gets $11 and our youngest $7 once per week. We do not tie it to chores because we expect our children to do their part to keep the house running whether they get a reward for it or not. Also, we find that they are more responsive to having screen access restricted if they don’t do housework.
The amount our kids receive for allowance is a lot, but we are generous for a reason. We feel that our kids need to have access to a significant amount of money for their age in able to learn how to handle it. Also, we require they ask us for their allowance every week in order to receive it, so some weeks they get none. The reason I tell them that I require them to ask me for their allowances is in order to teach them you don’t get in life what you don’t ask for, which is true, but really it’s because I often forget all about allowances and it makes them getting money their responsibility and not mine.
Our Family’s Rules for Giving, Saving and Spending
After our kids ask for and receive their allowances, we have rules as to what they are supposed to do with their money, and these rules use up a significant portion of what they receive. When our kids receive their allowance, they must first give back to God at least 10% because God’s providence is the reason we have money to give them. Then, we ask that they save 50% of what is left and after that they can spend the remaining amount as they wish. We ask this because we are hoping they’ll someday learn to live on 50% on their income so they’ll be able to achieve financial independence someday, and I think that hearing the 50% guideline consistently over their childhoods will help them remember it when they are grown. We don’t require they save 50%, only that they always save something. So some weeks they save 50%, but often if they have something in their mind they want to buy or a place they want to go to they’ll save much less. Finally, once our children set aside part of their allowance for giving and saving, our oldest usually has about $5 or so to spend per week and our youngest about $3.
The Benefits of Giving our Children an Allowance
Not only does an allowance provide us with an opportunity to teach our kids about giving, saving and spending, it has other benefits as well. One of these benefits is that when our kids ask for something, they have the ability to pay for it themselves if they really want it. Asking them to pay for it themselves lets them think about how money is a finite resource and determine if a purchase is really worth it. It also lets us know how much they truly want it. It’s surprising (or perhaps not so surprising) how much less kids want something if they have to pay its price. This is especially true of our son, who, even though he often forgets to ask us for allowance, is often reluctant to spend what he gets. And for those times our kids do ask us for something they genuinely want, it’s lovely that the item can come out of their funds instead of our budget. However, once in a while, they will want something that is very difficult for someone to afford who only has about $5 a week to spend. When that happens, if we think that what they want is wholesome and we have money for it we’ll offer to pay for half if they pay the other half. One recent example is that my son wanted his sixth grade yearbook, which was $40. Fortunately for us, he had enough money to pay for the whole thing, but if he hadn’t I would have gladly paid $20 of the $40 cost.
There are also a couple of other benefits to our the kids having their own money though an allowance. I really enjoy that it allows me to buy myself a treat guilt free when we’re out and about, like a coffee, without buying them something. If they want something too they can pay for it themselves, they just need to decide if the purchase is worth it. And all of the chances they have to purchase or not purchase things they want allows them to feel what it’s like to have a limited amount of money, so I believe they can understand a little bit when we explain why we choose to spend money on some things but not others.
So that’s why and how our family does allowance. I hope that though it they learn how to give, save and spend so that when they’re adults they’ll make responsible choices and hopefully someday be generous givers and even learn to live on half their income. And if not, they’ll have fond memories of years of candy and Nerf guns they didn’t need to beg their parents for. So how about you? Do you give your kids an allowance? Have you found a way of doing it that works for you?