Pocketmoney: Yes or No? And Why?

[sahm99]

We are on the fence about whether to continue to give our kids pocketmoney. There has been an incidence which would justify stopping...

 

What are your reasons for giving or not giving your kids an allowance?

 

On one hand I find it "weird" to just hand out money...!

On the other hand our kids don't have the possibility to "earn" money, as all household chores are part of what we expect of them anyways, and no outside work is possible.

 

I think it is important for kids to learn to deal with "their own money"...but is this the right way?:confused:

 

Alternatively, we would just give them money on a need-basis (to buy Christmas presents, or the occasional sweet or little toy, or see friends at the pool...).

 

I am looking forward to hearing about how you deal with this topic in your families, and what your reasons are.

[QueenCat]

We've always given our kids an allowance or pocket money. As they get older, they get more (but have more to do with it too). It helps them to learn how to manage it, sometimes well, sometimes not. But it's theirs, so unless a purchase would go against family values, they could make it with their money, if it didn't make sense to me. Now they're older, so it's no longer an issue (the $ coming from us part, they still don't always do what I would do).

[Night Elf]

My personal reason for giving an allowance not tied to chores is that all members of our family deserve to benefit from the income coming into the household. Only my DH works and it would be horrible if I only got an allowance based on the chores I do around the house. We just don't see a difference where our children are concerned. I stopped giving my oldest dd an allowance when she started making her own money and she had no problems with that. She understood the concept.

 

We always bought things for the kids as they asked for them but it was easy for me to overspend. By giving them an allowance, it helps them learn to budget and spend wisely. We have given advances in allowance but it's never carried more than one pay period. IOW, they aren't behind in what they owe. This teaches them that it's important to pay debts in a timely manner.

 

We all get allowance, even DH, on his paydays, twice a month. DH and I get a larger allowance than the kids because we use our allowance on things for the family. For example, if dd13 and I go out shopping, I use my allowance to buy lunch. When my allowance is gone, I have to wait until the next payday. Sometimes she buys lunch for me! :)

[Mrs Mungo]

My kids get pocket money because it lets them make their own decisions and it makes my life easier. You want gum? A lego kit? A new purse? Do you have your allowance? Oh, you spent it? Okay then, there's your answer.

[T'smom]

Mine are still too young, so this is all theoretical for us....so feel free to ignore me!

 

We plan on giving an allowance that would reasonably cover the expenses that we expect them to cover. We won't tie it to chores because chores are an expected part of being in the family. Hopefully, this will help them learn to budget- if I buy this candy, I can't buy that toy. I also hope that this will cut down on begging for things in the store. We will encourage giving, short-term savings and long-term savings. I've also heard a great idea about chores- if you choose not to do them, a sibling will be asked and they will be paid for it from your allowance!

[Daisy]

We give our children opportunities to earn money for special activities (camp, vacation, etc).

 

We give them the money before leaving on a trip and tell them that is what they have to spend. No asking for snacks, goodies, souvenirs, etc. They decide how to spend that money. They can spend it on junk or they can save it. It is up to them. It has been so nice since we started that. No more asking for everything.

 

We used to give allowance ($4 a week) but our finances have changed a bit and we've had to drop that. The kids understand. It was nice when we were doing that though because it gave the children opportunities to save up slowly for a larger item or buy presents for each other for birthdays, etc.

 

They still carefully save any money they get for birthdays and Christmas and use that through-out the year, but I do wish we could go back to doing an allowance because it was a positive experience for all of us.

 

I still find ways to show them frugality. For example, I told my 9yo son that I had $20 set aside to buy him sneakers and that was all he could spend. When we went to Target, he saw a really cool pair of sneakers for $19.99 and a plain pair for $12.99. He choose the plain pair and was able to buy himself a motorcycle t-shirt with left-over money. He was very excited. So I try to include the children in financial decisions whenever I can so they learn.

[Lady Florida.]

My personal reason for giving an allowance not tied to chores is that all members of our family deserve to benefit from the income coming into the household. Only my DH works and it would be horrible if I only got an allowance based on the chores I do around the house. We just don't see a difference where our children are concerned.

 

My kids get pocket money because it lets them make their own decisions and it makes my life easier. You want gum? A lego kit? A new purse? Do you have your allowance? Oh, you spent it? Okay then, there's your answer.

 

 

These are the reasons why we give allowance, and why it's not tied to chores.

[regentrude]

We give allowance so kids can learn how to manage money. Even if you do not give an allowance, you sometimes probably "just hand them " stuff - candy, or toys, or other things. Instead of buying things, we give them an allowance and this way all discussions "Can I have...?" are ended, I simply say "yes, you can use your own money." (Many things immediately cease to be wanted, and the kids think good and hard about their choices)

It is a great tool to learn budgeting, saving, delayed gratification, research about prices. My kids have the opportunity to earn additional money doing extra work, but I do not pay for household chores - they are part of being a member of the family.

[Ginevra]

My kids get pocket money because it lets them make their own decisions and it makes my life easier. You want gum? A lego kit? A new purse? Do you have your allowance? Oh, you spent it? Okay then, there's your answer.

:iagree:

 

Same here. It's great because then dc can really think about how important it is to have Legend of Zelda Version 57 or whatever. It takes it off my shoulders to constantly have to think, "Should I get this game, candy or doo-dad? Am I being too stingy? Am I being too pampering?" They learn very quickly that if they spend the money foolishly, there is no more when something really worthwhile comes along.

 

They do chores, but they are required. I do give them opportunities for "money jobs" sometimes - harder jobs for a few extra dollars. Other then that, the allowance is a perk of being part of the family and chores are a responsibility of being part of the family. The two are not connected.

 

ETA: I agree with regentrude, too, in that it helps them learn to research prices. Ds11 wanted "Guitar Hero" and I was not buying the game and guitar - it's too expensive. So, he saved his money and he kept researching used games on Amazon until he found a good bargain that included both parts. I was so pleased with his resourcefulness!

Edited July 6, 2011 by Quill
I'm a blabbermouth

[elise1mds]

I give my kids homemade funny money at the beginning of every month, and they can earn and lose it depending on behavior/attitude, doing extra chores, etc. At the end of the month, I take what they have left and divide it in half. Half goes into savings and half goes into a 'debit account' with me and their father. If they want extra clothes, toys, art supplies, science equipment, treats, etc., above and beyond what I feel is necessary, they can use their 'debit account' to get it. I keep track of how much they have in their account in a list on my phone. This saves me the hassle of having to give them cash and teaches them to plan for bigger purchases. The big question they always ask when they decide to spend some of their money is, "How much will I have left?" It's good to know they understand, even at a young age, that they have to live within their means.

[angela in ohio]

No pocket money here. We have an unusual arrangement, in that our entire family shares money as a household. When anyone needs anything, we decide whether it is a worthy expenditure (it's a lot more informal than it sounds.) Our kids know our financial situation (and help make the decisions about it,) so they know what is a priority and what is not. When they truly need something, they say so, and we buy it. Any money they recieve as gifts goes into their savings account, CDs, etc. Dh and I don't buy a lot of little things for ourselves, so our dc don't either. I have a problem with the concept of giving money to "burn a hole in the pocket." That's how I was raised, and it gave me bad habits that I had to break. I think it's easier to teach money management skills within the scheme of an actual household budget, as that's what they will need to manage when they are an adult. They understand that when the electric bill is higher than usual, or you need to give extra money to someone in need, your personal cash flow for fund stuff doesn't remain steady, but needs to be adjusted.

Edited July 6, 2011 by angela in ohio

[Desert Rat]

I agree. My boys get a quarter per year they are old. They earn extra money doing chores at my parents' house, but at our home it is expected.

They are both into pokemon cards and that's what they save for right now. Both have bank savings accounts. They put half of their earnings into that. Ds11 has said from the beginning he's saving for retirement. Ds8 is saving for college. I don't know if they'll change their minds when they want a car or something else big, but I like that they feel like the get everything the need and can buy the things they want with pocket money.

It's been hard to watch them buy candy with it though. We don't deny sweets in our house but something in me just cringes when they do.

[Lily_Grace]

We've done different things for different ages. In the beginning, pocket money was given and kept separate from chores. Two different skills to learn, and while money management was being heavily taught I wanted more say on what was done with the money (unlike earned money, where there are less rules in our house).

 

Last year The Kid was in school and was given a sum at the beginning of every month that he had to budget for lunch, savings, donations, school supplies, etc. and make it last for the 30 days. Now that he's home again the rules have changed. Chores are not paid for but contracted work is. He submits a bid, gets it approved, and signs a contract stating that he will do X for $Y. We have a list of ideas of jobs but he's welcome to submit anything outside of his usual chores. They're not always approved, but that's part of the learning process, too. We have him set up with familymint.com so he's learning how to do online banking as well as having him fill out a check when he wants to withdraw money to buy something. I figure as he gets older and his needs change we'll just evolve our teaching to keep pace.

[elegantlion]

We give allowance tied to chores. The paid chores are "above and beyond" what we expect as simply being a part of the household.

 

Purpose: To learn money management skills. Dh and I learned the hard way. I got an irregular allowance as a child, I never learned how to budget for wants because I never had enough to figure it out. I would ask parents for money when I needed, sometimes got it, sometimes didn't. Not one iota of how to deal with money training, parents thought we got that in school. :lol::lol: Had disastrous in my 20s, lots of CC debt.

 

Ds is responsible for buying his own entertainment. He has been since about 9 or 10. We did a lot of toy aisle economics when he was little. He is very good about his money.

 

When he works with dh, he gets paid.

 

Bottom line: Do I think paying for chores is a good thing? Not necessarily, but its his source of income. Do I want to be bailing out my son in his 20s because he's just learning how to budget for things? Absolutely not.

 

I am a firm believer that learning to manage money takes years. There's lot of subtle internal dialogue that happens, there are a lot of regrets and mistakes. I'd rather him learn that lesson at age 10 with a pack of Pokemon cards (which he did) instead of at 18 with a 500.00 limit credit card. I think starting younger is better.

 

We have tweaked for his personality. For instance we don't budget his clothes into his allowance. If we did he'd never have anything that fit, he never buy anything new. If we had a child that was more into clothes (or whatever) we might make that something they are responsible for. Ds likes computer stuff and Xbox, most of his purchases revolve around that. We don't buy his games (unless it's for a birthday or Christmas).

 

As he gets older we'll add in more training, but we're going to push for him to use debit cards instead of credit cards. We'd also like him to learn to live on a cash basis, except for maybe student loans. My car, which is paid for, will eventually become his.

 

Not having good money skills really screwed up several years of my life. I'm not willing to wait to teach ds. And yes, we remind him that we are the bad example.

[Night Elf]

It's great because then dc can really think about how important it is to have Legend of Zelda Version 57 or whatever.

 

:tongue_smilie: I've had my children decide something is not worth THEIR money but they would have insisted it was necessary if I was using my money.

[Ginevra]

:tongue_smilie: I've had my children decide something is not worth THEIR money but they would have insisted it was necessary if I was using my money.

 

Yes, exactly why I love allowances!

[ondreeuh]

I would have a hard time handing out money for certain occasions because it takes away the self-management aspect of it. We have our kids' allowance direct-deposited into their savings account. This eliminates impulse shopping and they have saved up for some really neat things! DD bought a laptop, and ds just bought a Wii. They get a modest allowance for basic chores but I do pay them for extra stuff (babysitting for a substantial time, mowing the lawn, washing the car). I buy their necessities (basic clothes and shoes, food) and they purchase toys, games, movies with friends, etc. It works really well for us and my favorite part is that they NEVER, EVER beg. I can take them down the candy aisle or to the biggest toy store and they don't even think of asking for stuff because they know they can buy it with their own money.

[LostSurprise]

I am a firm believer that learning to manage money takes years.

 

Yes, this.

 

We had very irregular money sources as children (occasional birthday money). Some of my siblings are born savers. Their personalities are very careful. My sister was not that way and it took several years of being an adult to moderate her impulsive-generous nature.

 

My oldest is the same way. Over the last 5 years I have seen the light go on for him very, very slowly. Now I see him thinking about purchases beforehand and weighing pros and cons. He also has brainstormed ways to help himself save money.

 

He still makes really bone-headed mistakes. He's 12. But I see him on the right road and its worth every penny of "pocket money" and the best thing is that its all self-motivated and learned so it will stay with him his entire life.

[Lady Florida.]

:tongue_smilie: I've had my children decide something is not worth THEIR money but they would have insisted it was necessary if I was using my money.

 

Funny how that works isn't it? Ds is older now and starting to think differently, but I used to have to hold back the laughter as I watched a look of horror cross his face when I said "Sure you can get <random junk item>. Did you bring your money with you?"

[butterflymommy]

My older 2 kids are paid for babysitting and chores. The younger ones (aged 9 and down) really aren't dependable enough to be "paid" for reliable work, so we don't pay them, yet they are required to make their beds, keep their rooms picked up, and wipe down the bathrooms they use. Once they are older (around 11-12) and can do a better job, I will start paying them. I would never just give money to my kids, I would make them earn it one way or another.

 

I pay my older two $50/ a month each but they do a tremendous amount of babysitting (their 3 yr old sister) while I sleep or run errands, they also do dishes, carry and put away laundry, and pick up the floor. The babysitting is a huge help for me, I don't know what I would do without it!

 

Since your kids are already required to do chores, why not add some more work and pay what you think is fair? Older kids can work a lot harder/ better than younger ones so can be paid more.

[nukeswife]

Because we were having issues with our kids not doing their chores we've tying their allowance to it. They have the possibility to earn $5 a week. I used to pay them on a tier system for it.

 

90-100% of chores done =$5

80-89 % of chores done =$4

70-79% of chores done =$3

60-69% of chores done=$2

50-59% of chores done =$1

 

So it was up to them and they learned quickly that if they didn't do their chores they didn't get any money.

 

We've now switched to a chore chip system (I put stickers of the chores on poker chips) and if they have 90% or more of their chips turned in they get a sticker on an incentive page I bought at the teacher supply shop. Once they get 20 stickers they get $5. The chores on the chips are things most people here seem to not pay their kids for, but since we see them as their job we pay them to do them. I also have special chips that have things they can do to earn an extra sticker because they want to earn more money quicker for something. These are usually chores I do, but that they could do to help me out, so they are worth more than their usual chores.

 

We switched because it was getting to hard to pay out the various amounts because I would never have singles when I needed them or any cash at all for that matter (dh gets paycheck direct deposit)

 

We just started the chip system, so we'll see how it works and figure out if we'll keep it or try something else.

[veggiegal]

I've been greatly influenced by the views of Gail Vaz-Oxlade, who's TV show Til Debt Do Us Part you may have seen, on the topic of allowance. She advises giving children an allowance not attached to chores, and that this is the money you would be spending on them anyways for little things here and there. There are several reasons for doing this:

 

1 - Kids need practice managing money. Here, we do $1 / week per year of age, of which our children divide it into "savings" (in the bank for future), "giving" (charitable donations), "Family tax" (everyone gets docked 20% off the top, and we use the pooled money for fun things, like pizza and movie night, going swimming / skating / bowling, etc.) and "spending". The overall lesson here is that you will never, as an adult, have 100% of your income be for fun spending. I agree with Gail that we do a huge disservice to kids allowing them to think 'all money is for spending' with allowance as they grow up, or--especially--when they get their first jobs and still live at home. It can be quite a shock to those kids used to spending pretty much all their pay on their "wants", that when they they move out, they have to take care of "needs" first.

 

2 - Kids are expected to help out around the house without pay, just because that's part of caring for your home. I will pay if it is a job above-and-beyond the usual stuff, that I would pay someone else to come do.

 

3 - The whining for stuff stops. My kids are free to spend their "spending" money however they want, and it doesn't take them long to learn that blowing it on candy and mini-donuts at the amusement park meant they had no money to buy the cool new video game, book, toy dinosaur, etc. But when we were out and the "Can I have X?" questions started, the standard reply, "Sure....it will cost you $x from your allowance. Is it worth it to you?" stopped the whining cold. We'd help them understand the relative costs of items by comparing them to things they understood (e.g., that little bag of mini-donuts costs the same as a small dinosaur figurine). My kids simply don't whine for things anymore; they know they can buy it if they have the money and want to. And they know Mom and Dad won't buy it for them: that's WHY they have an allowance.

 

I grew up in a house with no allowance, until my Dad decided when I was 16 (yes, 16!!!!!) to give us $2 / week. (Ummm, yeah. I am NOT that old. I was a teen in the 80s. $2 / week was all but useless, and I made far more babysitting). As a result, when I became an adult I had zero money management skills, and--like so many others--got myself into some financial troubles as a young adult when I moved out. I am hoping that by doing things this way with allowance, our kids will learn these skills at a younger age, including making mistakes when they are of far less consequence. Not having enough money to go with your friends to a movie or amusement park is no fun, but it's hardly in the same league as being unable to pay your bills / utilities / rent.

 

My kids also use their spending money for things like library fines, gifts for relatives (we'll sometimes split the cost with them), and my 9 year old is currently paying us back for the repairs to his camera, which he broke by being foolish. $115 (yes, it would have been cheaper to buy a new beginners digital camera, but he wanted the one we'd given him for Christmas) paid back at the rate of $2 / week is leaving him with precious little spending money, but it's a lesson I'd rather he learn on a $100 camera than a $10,000 vehicle. Yes son, debt stinks and can eat up a lot of the money you could otherwise be having fun with...great life lesson, no? :D

[TheReader]

My kids get pocket money because it lets them make their own decisions and it makes my life easier. You want gum? A lego kit? A new purse? Do you have your allowance? Oh, you spent it? Okay then, there's your answer.

 

This.

 

We decided on a reasonable amount and it winds up easier all around, and we also find it curbs impulse shopping. When the answer is, "Sure, if you have the money for it" the child (at least in our case) stops and thinks, "Is this worth spending *MY* money??" and many times decides no.

 

It also helps us budget, since we know exactly how much each month will go to kid incidentals, rather than randomly buying the $1 coke, or the pack of gum, or the hot wheel car, or the whatever. For us, me in particular, it is way to easy to say Yes to some tiny thing (oh, it's just a dollar, or less) and then it adds up, FAST. We actually save $ by giving an allowance, b/c now all those little $1 purchases are theirs, not ours, and thus never exceed what we've budgeted for allowance/pocket money.

[veggiegal]

 

 

 

It also helps us budget, since we know exactly how much each month will go to kid incidentals, rather than randomly buying the $1 coke, or the pack of gum, or the hot wheel car, or the whatever. For us, me in particular, it is way to easy to say Yes to some tiny thing (oh, it's just a dollar, or less) and then it adds up, FAST. We actually save $ by giving an allowance, b/c now all those little $1 purchases are theirs, not ours, and thus never exceed what we've budgeted for allowance/pocket money.

 

:iagree:

 

That has been our experience too.

[Farrar]

Like others said, I think the money management skills it can help them learn plus the ability to just say, "Save up for your own junky toys," is why we do it.

 

By the way, we pay interest on money saved as well. So my kids are 6 yo and they get $1 a week. But they also get .05% interest on whatever is in their wallets as well, so it's not uncommon for them to get between $1.50-$2 in a week, depending.