Money Matters - Kids & Cash: Allowances
BOSTON (CBS) - I do believe kids should get an allowance and I also believe it should not be tied to work that they do around the house.
Podcast
All children should be expected to help around the house, setting the table, folding their laundry, and putting it away, taking out the trash, cleaning up after dinner etc. You can pay them for the extras if they wish to earn more money.
As they get older they can tackle some of the larger household chores such as raking the leaves, mowing the lawn, washing the car, jobs you would normally farm out to someone else or do yourself.
Make sure your sons and daughters have equal opportunity to learn about all of the necessary chores it takes to run a household. My daughter mowed the lawn and spread bark mulch and my son learned to cook and clean up which lead to a cooking career.
Children need to have money of their own, to spend, to save and to make mistakes with. Indeed mistakes! But as parents we don't want our kids to make mistakes. We coddle them. We protect them.
We don't want them to suffer the disappointments we suffered when we sent away the cereal box top with our money for the fancy decoder ring which when it came did not decode! Or the toy we wanted so badly that was broken within a week. But allowing a 10-year-old to make mistakes with $30 is so much better than $30,000 at age thirty.
The experts recommend giving a dollar amount to match their age. So a 10-year-old would receive $10 a week. In tight economic times that may be unrealistic. So start with half that amount if you can afford it. Now if you expect them to also buy their lunch at school, pay for entertainment and pay dues to the cub scouts from their allowance you will need to increase it. In my research I found an allowance calculator to help.
But if you are laid off or just took a pay cut then they need to realize that the allowance either goes down or goes away until better times come along for the family.
Now for the hard part, if the kid has more week than money you can't bail her out. If she spends most of her money on the weekends give her the allowance on Monday. Now she has to plan for the whole week and if by Friday it is gone don't rush to the rescue. Let her pack her peanut butter sandwich without an "I told you so".
And when she starts to whine on Saturday that all of her friends have money to spend at the mall turn a deaf ear. Remind her gently that she will get her allowance on Monday as scheduled. And no advances here! In real life if she takes a job at McDonald's they won't give her an advance. This is a great way to learn about budgeting.
One more thing: PAYjr is an elaborate allowance system transferring money as soon as parents sign off on the website that chores are done.
