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About allowances…

April 13, 2011

Sometime in your child’s early years you may get tired of handing out loose change or dollar bills or enduring repeated pleas for whatever he or she really, really, really wants to have.  (“No, really — I need it.”)

Or maybe you’ve just decided that it’s time to teach your child the value of money.

And so — a few thoughts about allowances.

Parents are often inclined to link an allowance to the completion of chores.  (“I have to work for a paycheck, and she should, too,” this thinking goes.)

But do you really want to be your child’s employer?  These arrangements can easily turn into power struggles — with reductions in allowance for work poorly done, or an allowance withheld because chores aren’t done at all. Or, when you ask your child to do something not on the chore list, and your child responds with, “How much will you pay me?”

One approach is to explain that everyone in the family has chores — that we all need to help one another, and take care of the place where we live.  We do those things because we live together and have responsibilities to each other.

An allowance, on the other hand, is a teaching tool.  You might sit your child down and say, “We’re going to give you an allowance so that you’ll learn how to handle money.  How to make a budget, plan for things you want, and learn how it feels when you run out.  So from now on, you’ll be getting $X every Saturday.  We’ll help you learn how to use it, and we’ll talk about it together.”

The amount should be appropriate for the child’s age and developmental level, and in accord with the family’s finances.  Stick with small amounts at first, until you see how your child handles it.  (Think carefully about how much money you can stand to watch your child spend on candy.) Let kids know that the allowance may increase when you see that they can make good decisions about their money.  (And yes, it will be very hard to watch them buying things that you know are worthless pieces of plastic junk: just remember that it’s a learning tool.)

Make it predictable: hand it to the child at the same time every week.  Don’t withhold it because, for instance, the child just received birthday money from an aunt, or because he or she got to pick out something at the store that you paid for. Your child may see such tactics as unfair or arbitrary, and the lesson about handling money is lost. You might tell the child to wait until allowance day — but don’t withhold the allowance.

Parents are often tempted to withhold allowance when children do something they’re not supposed to do.  It may not feel great to hand money to a child who has told lies or done something unkind or destructive the day before, but using money as a reward or punishment is another slippery slope.  Deal with the objectionable behavior — but don’t do away with the allowance.

Inevitably, we transmit to our children our own ideas — good and bad — about what money means in our lives. It’s worth taking some time to sort through those ideas.  Does money mean power and control?  Is it about love and approval? What did our own parents think about money, and how much of that have we held onto?

And with this new opportunity to teach your own child about money, what do you want to say?

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