Kids & Cash: Allowances

BOSTON (CBS) - Should you give your kid an allowance? If you do, how much? If you do, should they be expected to do chores for that allowance? Do you have household jobs like weeding or folding laundry that you are willing to pay the kiddo to do?

There are several schools of thought on allowances. One is to just give kids an allowance with no strings attached. Another is to attach chores to getting an allowance. A third is no allowance and the kid is expected to do chores because they are part of a family. They could earn money by doing age appropriate chores.

When my kids were little, I believed allowances should not be tied to work that they do around the house because I expected my kids to want to help around the house. Ha! It wasn't until I tied their allowance directly to chores did they begin to want to help around the house.

Some studies have shown that the "No Work for Allowance" theory has produced a generation of entitled kids with no work ethic. I'm not convinced that is the only reason these kids feel so entitled!

There was an interesting article in the Wall Street Journal, Why Children Need Chores by Jennifer Wallace. According to the article "giving children household chores at an early age helps to build a lasting sense of mastery, responsibility and self-reliance". According Wallace, you can help build your kiddo's self-esteem and teach them about money by giving them an allowance tied to chores!

I do believe if you can afford it kids should get an allowance because having money of their own gives them the opportunity to learn about saving, spending, and delaying gratification and perhaps work ethics.

And the child should be allowed to make mistakes with their money. But as parents we don't want our kids to make mistakes. We protect them. We bail them out if they run out of money. Don't do it! They'll never learn!

The experts recommend giving a dollar amount to match their age. So, a 10-year-old would receive $10  a week. Now if you expect them to also buy their lunch at school, pay for entertainment and pay dues to the girl scouts from their allowance you need to increase it. Help them set up a budget.

I found an allowance calculator online to help figure out how much you should give your kiddo. It's an interesting exercise for they ask you what kind of an allowance you got as a kid.

A word of advice here, if the kid has more week than money do not give them an advance on their allowance.

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You can hear Dee Lee's expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.

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