Allowance or No Allowance

Ever heard one of these from your kids?

“Why don’t I get an allowance?”

“Charlie gets $3 for taking out the trash, but why do I only get fifty cents?”

“I really want it! I’ll pay you back; I promise!”

Just like with most parenting decisions, it can be hard to know what’s best. Deciding on an allowance is one of those difficult decisions and is an old debate among parents.

The good news is, whether you decide to give an allowance or not, you can still help your children prosper now and in the future.

So, the big question: Do you give an allowance or do you not? Let’s take a look at both.

Allowance

If you decide to give an allowance, consider not making it all about the chores they do or don’t do. You want to show them that as a family, everyone must pitch in to make it work.

Remember the purpose of giving an allowance. It’s not so your kids will stop hounding you to buy things. (Newsflash: they’ll keep asking for more!)

The purpose is to teach them how to handle money responsibly. By giving them a little money to play around with while they’re young, they’ll begin to understand its capabilities and limits.

No Allowance

If you decide not to give them an allowance, that’s OK! You are the parent and can make that decision.

But, if you choose not to, think about finding other ways to encourage responsible money management. You can do this when they receive money for birthdays and holidays.

If they’re teens, you can encourage them to find a job like mowing lawns, working at a restaurant, or tutoring neighborhood kids. Or, give them a budget for certain things like clothing and vacations. They may not have the money physically in their hands, but they’ll start to understand the choices they have to make in relation to their budget total.

No matter the way they receive money, or how much, you can set up some guidelines to help them manage their money wisely. Many parents have decided to create savings jars in three different categories:

Saving:Explain to your child this money will go into a bank savings account once the jar is filled. That way, when they’re older, they’ll have money to spend on a car, college tuition or other big expenses.
Spending:Just because it is “their” spending money, doesn’t mean you can’t have a say in what they choose to do with it. Talk to them about different ways this money can be spent. Continue to remind them once the money is gone, it’s gone. This money can be spent on vacation souvenirs, a movie out with friends, buying a new toy or book, etc.
Giving:Empower them to help others at an early age! Give them a few different choices of what they can give their money to. Depending on your values, this could be church, a charity, a local family raising money for adoption, and more. Let them make the ultimate choice but show them a variety of different ways their money can help someone else.

What do you do once the money in their spending jar is gone?

This is a tough question to answer, which explains why so many parents struggle with it. Here are a few scenarios:

They’re in a store and their child really wants a toy, but their spending money is all gone. What should they do?
Their child’s friend has invited them for a weekend trip, but it’s not in the parent’s or child’s budget. What should they do?

The best answer is it’s different for every family and situation. The main idea is to not exceed your financial capabilities to satisfy your child.

You can show them the hard decisions you have to make when it comes to what you want and need in comparison to the money in your bank account.

Try to explain the hard choices there are to make. If you need to say no, explain why the answer is no in that situation.

Remember, the point of giving an allowance is to teach them become great managers with their money before they enter adulthood.

If you’re searching for more resources on teaching your children about money, then continue checking out Prosper Kids! For more on allowance advice, here are a few other resources you can look at: