Comments on: Kids and Allowance

By: Kelly Whalen

Kelly Whalen — Thu, 29 Jul 2010 23:04:09 +0000

Elissa,
Thanks for the compliment! I think it's wonderful that your 10 year old was able to see the effects of savings. My 12 yo is almost there-he's saving for a big game, but keeps putting off buying it, so I'm hopeful that seeing those numbers grow will help.

By: Jen

Jen — Wed, 28 Jul 2010 01:19:29 +0000

Kelly, since your kids are so close in age, have you had any trouble that one gets more each week than their younger sibling? We started out doing the “pay your age” thing but it seemed really unfair that the 5 year old was able to buy stuff more quickly than the 3 year old so now we pay them equally.

So far I have let them spend it however they want without enforcing any charity or savings but it really irks me how my older one is eager to buy anything he sees, just because he wants to buy SOMETHING. I wonder if we are really teaching any good lessons here or just feeding into his consumerism.

By: Elissa Freeman

Elissa Freeman — Wed, 28 Jul 2010 01:01:58 +0000

Love this post! I like the way you explored the allowance issue beyond chores…I think the notion of budgeting is absolutely key. When my 10 year old receives allowance (or 'grandparent money'), she puts a portion – or all of it – in the bank. She quickly learned what it's like to see your balance grow (of course she's not paying bills yet!). She's also learned that when she wants the ” I've got to have that” trinket…once her money is spent…it's gone. That too, is a valuable lesson.

By: Ultimate Blog Party ‘10: Welcome!

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[...] Kids and Allowance [...]

By: Bill Dwight

Bill Dwight — Sat, 06 Feb 2010 03:36:30 +0000

I completely agree that there is no one "right" approach. Adopt the approach (or blend of approaches) that fits best with your family and your values. (BTW: There are some great variations/refinements listed in the comments.)

I think the most important thing is to have AN approach and to apply it consistently. Although it's perfectly appropriate to fine tune it along the way as you get more experience and the kids mature – just don't be ad hoc! That just models poor habits and leads to a lot of friction – particularly with teens.

Learning to be financially responsible (and charitable!) is a critical life skill. Honing skills takes practice. Putting a consistent allowance and/or chore system in place with your kids is a great way for them to learn the skills, practice them, and (inevitably) make mistakes in a friendly environment (or presumably a more friendly and nurturing environment than what they'll encounter in the real world – think credit card companies!)

Where to keep the money? We found keeping it "in the mom or dad’s wallet for safekeeping" really didn't scale well. It gets very hard to keep straight. Having 5 kids, it became particularly unworkable for us. Being a software geek, I built a little web application to help simplify things for my family many years ago. Seeing the positive effect this had on my kids over the years, I ultimately decided to dedicate my profession to this endeavor and took the last three years (along with my old college roomate and computer science colleague) to build out a pretty elaborate "online virtual bank" at http://www.famzoo.com. After testing it with 100+ charter families, we finally launched last month. We'd be delighted to have people check out our tour: http://bit.ly/aijBY7 Tell us what you think.

To be fair, ours is not the only game in town, so look around at other services and compare to determine what works best for you. I'll just say that using such a service really simplifies the process and helps you be a much more consistent and effective mentor in this area to your child.

Regards,
Bill
Founder, FamZoo.com

By: Tamara B.

Tamara B. — Sun, 31 Jan 2010 00:06:31 +0000

Wonderful ideas that I plan to impliment with my two cildren!

By: Alison@This Wasn't In The Plan

Alison@This Wasn't In The Plan — Fri, 29 Jan 2010 19:35:25 +0000

Wonderful post. My son is five and we’ve started doing an allowance with him and it is very similar to what you are doing. I don’t force him to save any portion of it, he’s figured out on his own that if he wants to purchase anything of much worth, he’ll have to save his allowance for two or three weeks or even more. I think that savings lesson is much more powerful than me dictating how much he needs to save.
Alison@This Wasn’t In The Plan´s last blog ..The Benefits of Banking Online

By: hchybinski

hchybinski — Fri, 29 Jan 2010 16:14:48 +0000

Great post – always looking for new ideas in the allowance game. . .we go back and forth – no "real" process yet – oldest is 9 and we are paying for all his necessities and most of his wants. . .he is saving most of his holiday & birthday money. =)

HIllary

By: Top 135+ Personal Finance Posts for 2009 (That can be used 2010 and beyond)

Top 135+ Personal Finance Posts for 2009 (That can be used 2010 and beyond) — Mon, 28 Dec 2009 17:32:12 +0000

[...] Kids and Allowance: If you have kids, part of your job as a parent is to teach them about money management. Here I discuss why an allowance is an important tool, and how you might go about giving your kids an allowance. [...]

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