Kids and Cash

Got any money?

Got any money?

I do not want to raise spoiled brats.  I want my kids to understand the value of a buck.

But in the area in which we live, this is tricky.  Rampant consumerism is the norm.  My daughter’s best friend has a flat screen tv in his bedroom, a laptop, and is on his 3rd cell phone.  And he’s 12.  We have friends who vacation in Hawaii every summer, have annual passes to Disney,  and eat out 5 nights a week.  Moms bring their kids carmel macchiatos from Starbucks at lunchtime to the grade school.  7th graders get regular mani/pedis and $200 salon dye jobs.   And the competitive party throwing (each kid’s birthday party must be bigger, cooler, more interesting, and BETTER than the last) starts in preschool.

No matter what type of store we go into, my kids want something.  It could be the hardware store, the drugstore, or Kinkos/Fedex- it doesn’t matter.  If there’s something to buy, they want it.

My kids each have a bank account where they deposit Christmas and birthday money and any other money they get throughout the year from pet sitting, extra chores, etc.  They also get a monthly allowance that they deposit on the first of each month.  It isn’t much, but I want them to learn how to manage money, plus I get tired of being their personal ATM.

The problem comes when they want to spend money.  It’s always, “Buy this for me now and I will pay you back.”  I’ve stopped doing this because they forget, or I forget, or they think they’ve paid me back when they haven’t.

My daughter has been wanting this thing called a Zhu Zhu Pet.  It’s basically a battery-operated hamster.  Unfortunately they are sold out of it in our area.  You can get them online at a MUCH higher price, plus shipping.  My darling daughter wants me to whip out a credit card and pay the inflated price.  She will pay me back.  She thinks it’s perfectly ok to pay $23.98 for a toy that normally sells for about $3. at Walmart.  “It’s not that much, Mom, and I HAVE MY OWN MONEY.”  Why can’t she wait until the store gets another shipment?

We don’t have any set rules about how much money they can spend, how much money they can take out of the bank,  or what their allowance is actually for.  This is the problem, and I’m struggling to come up with the right solution.

I’ve read it’s not wise to tie a child’s allowance to chores, but I have heard myself say in moments of frustration, “If you don’t make your bed, I’m docking your allowance!” Shouldn’t the lesson be- “When you do a job, you get paid”?  Or should chores just be something you do because you’re a part of a family?  But if you don’t tie allowance into chores, the child can be a lazy piglet and do nothing around the house and still get his allowance, right?  Maybe another consequence is better, but I know that if I don’t work, I don’t get paid.  It seems like a natural consequence.

I want to instill fiscal responsibility.  I want my kids to be generous but also thrifty.  I want them to understand they should work for things, have patience, save up, pay their debts.  I want them to think before plunking down cash for things they don’t really need.  I want them to understand that Mom and Dad are not made of money.  In short, I need help.

So I have some questions for all the parents out there.

  1. Do you give your kids an allowance?  If so, how much? At what age did you start giving allowance?
  2. If you give an allowance, what do you expect in return?  Chores?  General respectfulness?
  3. Do you take away a portion of their allowance as a consequence for misbehavior?  For anything?
  4. What is your child’s allowance intended to cover?  Is it just ‘mad money’?  Can they spend it freely, without consulting you?
  5. Do you separate allowance money from other savings your child might have?

Thanks to any wise parents out there willing to help me think this through!


36 Responses

  1. you definitely raise a good point, and i just wanted to say “thank you” for giving me a few idea on how to handle my son’s increasing maturity level, and the need to teach him financial responsibility.

    unfortunately, i don’t have any advice… i honestly couldn’t imagine living in a town that was that dependent on material things. or maybe i couldn’t imagine being able to provide all those things? we just can’t afford to get that stuff for ourselves, let alone our kids. when he wants a toy, i tell him to save up for it… and by the time he’s finally saved up, he’ll either buy it, or have changed his mind. of course, he’s only 7 right now, so i’m sure i’m in for a lot of changes in the future…

    maybe it’s time to add some structure to his spending, before it’s too late…

  2. Our son’s 22 now, so we’re in a whole different area with money now. I will say this, though – he is tight with his money. I’m not sure if it’s because of something we did or if that’s just the way he is. When he was younger, he got an allowance – a dollar for each year of his age, but he had to divide it in thirds. One third was for instant gratification, one third was for saving for an expensive item, and one third was for his savings account and not to be spent. We didn’t dock his allowance for anything.

    • I like this idea a lot, but they don’t get very much per month, so dividing into thirds wouldn’t leave them with a whole lot to spend for the month. I guess they could always supplement with extra chores for extra cash, right?

  3. O wow. I don’t have any kids yet but want to someday. And this is scary! I emailed my husband what you wrote and he asked, where do they live because I don’t want to live there. 🙂 I told him I think it’s pretty much everywhere now.

    Good luck! Please update us with what you do and how it works. I can’t imagine.

    • We’re in southern California. It’s kinda crazy. I’m originally from the midwest and we didn’t grow up with much. Not like the kids around here who have to have all the latest stuff and every new electronic gadget.

      • PS MY kids don’t have all that stuff. No tvs in their rooms, no laptops, nothing like that. They’ve never been to Hawaii, and even though Disneyland is just 15 min. away they’ve only been a couple of times. No mani/pedis or salon treatments for them. Heck, not even for me. We rarely eat out and brown bag it almost always.

        We are the oddballs, though.

  4. Oh. And just a mention, growing up I either had such a small weekly allowance or just didn’t have one at all. So I did a ton of chores. My mom paid me per bag of leaves raked, per shirt or pants ironed, etc. Not much…like 25 cents per shirt or bag or whatever. But it helped. I did end up saving enough to eventually buy a trampoline in junior high and a tv/vcr when I was in high school. You’ll also be saving them a LOT of grief by teaching them these things now instead of when they get to college. My brother crashed and burned during college because he didn’t understand the concept of credit cards and ATM fees.

  5. My kids don’t get an allowance, per se, and I don’t believe in paying my kids to do things around the house. We are a family, and part of being a family is working together. Having said that, I do have a rewards system that I stole from my sister!

    Each week I put up a chart and on it are 8 issues/ responsibilities/etc., that we have deemed important or that we need to work on as a family. (Attitude, make bed, homework, 20 minutes reading, daily chore given by mom or dad [which is usually something that requires learning a life skill like cleaning a bathroom, emptying the dishwasher, vacuuming the floor], fighting, etc.) For each day they either fulfill the responsibility or issue, they get a star. Each star is worth 5 cents. Every two weeks, we add up the stars and see how much money they earned. They can get up to $5.60 every two weeks. It doesn’t sound like much, but it does add up. (I probably sound like a cheapskate, but we can’t afford a lot and they’re 8 and 11.)

    It’s very easy to lose stars and it’s very easy to get them. Like Saturday and Sunday are guaranteed homework stars!

    Once they get their money, we divide it up thus (right now they each have 4 jars that are labeled): 10% tithe, 30% long-term savings (which doesn’t get touched, and will end up in the bank), 30% short-term savings (which is something they want to save up for), and 30% spending (which they can spend however they want,).

    I will give them extra jobs if they want to earn more, and I will also offer double or nothing sometimes if they do things without being reminded.

    No negotiating. They either earn it or they don’t. Last week, neither one of my boys got their full amount and one got more than the other. This week, they’ve done a lot better at getting their stars. And when they want something I simply say, “You can use your cash for that” and they either have it or they don’t. If they don’t, they know they can save it for a few weeks until they do.

    Sorry for the soapbox!

  6. I provide the basics but if they want extra stuff that is not paid for by bday money, then they have to pay for it in hard labor. My son pitches an idea to me (like 5 car washes) for a bottle of cologne and I can accept, decline or re-negotiate the terms. In the end, they work for the extra perks.

    Sometimes, he loses interest in the item when he hears what it’s going to cost him in hard labor.

  7. We do give our kids an allowance of 20 dollars a week. They must do their daily chores to get it, and we don’t ever really question how they spend it. We provide all the necessities, and of course books, so if there is something they want from the store or online, they have to use their allowance. They are pretty good about not asking for stuff whenever we walk into a store, but my daughter tends to run through her money pretty quickly and sometimes tries to wheedle. We tend to not give in when she does this, and let her know she needs to be more responsible with her allowance. My son, on the other hand, saves and saves until he collects enough for big ticket items. It can be hard though, because all the other parents around here seem to just buy like crazy for their kids, and let them go through huge amounts of money.

    • Hi Heather.. just curious.. hold old are your kids? Mine get $20 a month- but because they want Club Penguin memberships ($5.95/month) it comes out of their allowance, so they only have $14. left over for the whole month. I need to rethink all this.

  8. These are tough questions. You want to teach your kids the value of money, but not be stingy either, or you may create cheapskates. Giving them an allowance is a step in the right direction. It helps them to learn to budget their money, even though other expenses will come up and they’ll ask for money at the Bank of Mom or the Bank of Dad.

  9. Love the post. (I have a 11 1/2 year old and a 10 year old.) They go to a private school, so we have the issues you have described. My daughter’s BFF has a freaking Blackberry. However, cell phones will not be granted until I feel they are warranted (i.e. they are in place where they might need me and there are no adults with phones.) Cell phones = trouble. I grew up on a farm and I had to work hard for my cash. My kids earn an allowance that is directly tied to specific duties. They slack off, they get docked. If they misbehave, they lose other priviledges, like sleep overs and video games. They use their allowance money for all things personal. They want a new video game? They want to buy a new movie? They want Club Penguin? They want to buy daddy a birthday present? They want to participate in the Survivor pool? It all comes out of the allowance. Despite all of this, my son is very free with his money. My daughter hangs onto it like a life raft. Because of my son’s “irresponsibility” with money, he is required to put half of his allowance in savings, the rest is his to spend. I’m not sure if he is learning from this or not!

  10. Great questions. My sons are grown now and very responsible so we must have done something right so here were our rules.
    1. Life is not fair, just because someone else has it does not mean you have to have it, period. No questions, no discussion.
    2. Each child has a set of chores that are required to be part of the family, no payment for these, consequences for not doing them though.
    3. A list of Extra Chores for payment is posted weekly with $$ you can earn. IE: raking all leaves in the front yard. $10. Be VERY specific and make them do it correctly. How they spend this money is at their discretion as long as it meets all family rules such as clothing, obscenity, etc.
    4. The first 10% of all $$ earned goes into a savings account that is not touchable by children until their 18th birthday. Period.
    5. Once a week we have a family meeting to discuss child complaints/issues for 30 minutes only. Parents make ruling, complaining complete.

    I know this sounds really harsh, and you and your husband have to be on the same page and it is really easier to give in than to follow the rules, but it is so important and my two boys have college degrees, the youngest is putting himself through grad school, owns his own home, always puts the first 15% he owns in savings and does not care what other people have or do. I must admit we were not quite so successful with the older one.

    They rarely gave us any trouble and they have been a joy as I know your children are for you, so just hang in there. And enjoy every precious moment.
    And while you are at it, Go give them a great big hug from me!!!

  11. PS: Our boys also went to private schools where the kids were delivered in BMW’s. I kept telling them, they were there to get a good education only. Kids just can’t understand that until they are older no matter what we say. It will just be hard for them. I did what I could to make it better for them but they won’t know that until they are grown and look back.

  12. First let me say – WOW. That is some major consumerism you mentioned here. Scary. We live in a small rural town & don’t experience much of that, but the few kids that my son goes to school with who are over-indulged are toughest to be around. I’ve yet to meet a spoiled kid who doesn’t have a sense of entitlement – just about the ugliest of character flaws.

    To answer your questions:

    Do you give your kids an allowance? Yes.

    If so, how much? I give certain jobs a $$ value – example vacuum downstairs get $2, dust $2. We do not pay allowance for them to clean their room or for picking up their things around the house.

    At what age did you start giving allowance? My kids are ages 5 and 10 & both receive allowance.

    If you give an allowance, what do you expect in return? Chores? Yes. General respectfulness? We don’t pay for respectful behavior, but it is expected. We treat chores like their ‘job’ – get paid for work you do.

    Do you take away a portion of their allowance as a consequence for misbehavior? No, because we treat it like their ‘job’. We withhold priveledges for misbehavior – we don’t dock their ‘earned’ $$. For anything? No.

    What is your child’s allowance intended to cover? Is it just ‘mad money’? Yes.

    Can they spend it freely, without consulting you? Yes, because it doesn’t amount to very much. But at their young ages they really only spend their $$ when I’m with them. Before family vacations we will encourage the kids to sock some extra $$ away for them to just ‘blow’ on trinkets and such.

    Do you separate allowance money from other savings your child might have? Yes. Allowance is theirs, as a reward/payment for their hard work. (and as an incentive to help me, sans nagging)

  13. I struggle with this on a daily basis. I’ll ask my son what he wants to do today and he’ll say he want to go buy a toy. And, you’re right, it doesn’t matter what store we’re in, both my kids want to buy something/anything.

    I don’t do an allowance, yet. My husband & I are still trying to figure this one out. But, the kids do get a lot of money from relatives for birthdays, etc. When that happens, they are ready to shop. I tend to give them a certain amount they can spend once in a while and I give it to them to spend. I’ve noticed they are much more careful when it’s their own money they spend.

    When I was young, my mother had a really good lesson w/money for me. Each clothes buying season, I was give a certain amount of money in cash. The two of us would go shopping for school clothes for the season. I was able to buy what I wanted, but once the money ran out, that was it. I learned to be a more responsible shopper. I plan to try this w/my kids when they get older.

    But, if you figure this one out, please let me know.

  14. I personally have no problem telling the kids “can’t afford it” or letting them know that if they really want it, they’ll have to save up their own money for it (combination of allowance + gift money if they want). Sometimes that makes them think about how much they REALLY want it – kind of like what Ti mentioned in her comment about the “hard labor” cost.

    I believe in connecting allowances to chores – like you said, it’s the “work for pay” concept – but just for particular chores. Certain things get done just because you’re part of the family – clearing your own dishes from the table and putting them in the dishwasher, for example. Other things – specifically, making your bed and picking up your room – count toward the allowance. Special chores can earn extra money. And if chores don’t get done, we do dock the pay (but we don’t relate it to behavior or anything else). We pay for everyday clothes, school lunches (once a week; they bring lunch on the other days) and haircuts – but if our 15-year-old wants her hair colored purple, she has to pay for that from her own money.

    And I know what you mean about raising kids in consumerist SoCal. Sigh…

  15. I never got an allowance growing up- I was expected to do household chores as being part of the family. If I did something extra above my usual chores- like wash my dad’s car- I could get $5 or something. And when I went babysitting, my mom made me put half of it in the bank. The rest I could use for whatever I wanted. If I wanted something pricey, I had to save up for weeks or even months to get it for myself.

    I’m struggling to figure out how to teach my own daughter money smarts. My husband grew up getting an allowance w/no expectations, and my in-laws swamp my daughter w/gifts, they buy her whatever she wants. So when she does get a gift of cash (seldom) I put it in a box and keep it for her until she’s a little older. Only five now, but I have to figure out how we’re going to do the allowance thing, soon.

  16. Sounds like we live in the same neighborhood! But we simply do not have the money to give our kids that kind of stuff on a daily basis and/or on demand.

    We just say no! Our kids do go to a private school–and we pay dearly. Yes, a lot of their friends all have fancy stuff. But a lot of parents are more strict in what they allow also (it is a Catholic school–that helps).

    We have an 8 yo boy, 12 yo girl (about to be 13) and a 14 yo girl, and my step daughter is 18 (she works and doesn’t spend it! She needs it for college!). No allowance. I agree with Holly–stuff around the house is done because you are part of a family.

    If my kids want a big ticket item (like an iPod) it will be a gift for Xmas or birthday. My daughter who just turned 14 wanted a guitar and we got her a really beautiful instrument. Unlike her spoiled classmates, she is very appreciative of anything she gets. That is not to say my kids don’t ever get what they want–they just have to work for it or wait for an occasion that warrants it as a gift. Both girls got an ipod Nano each for Xmas last year, but they didn’t get much else! They have cell phones, but they are pretty much for us to communicate with them–not for texting or talking for hours on end. They just don’t do it because they aren’t allowed and they are wonderful and obedient children. The have their own money, but they tend to save it, and if they want something, they know it will have to be approved by mom and dad.

    Not giving them everything they want really teaches them to be more grateful and appreciative for what they have. We are not harsh disciplinarians, but are kids are very well behaved, do well in school, pursue their passions ( the girls love music and are talented musicians) and are definitely happy in their lives. Other adults often comment to me on how well they speak to adults, how intelligent and interesting they are and how they wish their own children were like them. And you know, I think it may be because that’s how we’ve always been with them. Our expectations are high and they’ve always managed to keep up with those expectations, and happily, knowing it is making them better people–they are kind, they participate in our church masses almost every week, and they are just all around great kids–without the “stuff”! They almost always would rather stay home and be with their siblings and me (or me and my husband–he works nights) then go to a friend’s house for the night. And they do have some great friends as well. They’re out there too–kids like them , who aren’t so spoiled you can’t stand to look at them or their parents!! Even in our crazy area.

    Nothing annoys me more than a bunch of 13 or 14 year old kids all looking down at their cell phones–or adults. Ugh.

    Guess that’s why I read books, and why my kids do too!

  17. We had the exact problems/concerns about money for chores as you describe until very recently. We don’t really pay for chores, but they get an allowance. It got better recently because of . . . girlfriends! Suddenly they don’t need that new computer game, because they need to take Brianna to dinner at Friendlies.

    Good job not giving into the kooky materialism in your area. That’s just nuts.

  18. The twins used to get an allowance when I worked. It was $5 per week. And, they earn it via chores. Now, I’m broke as hell and they do chores for room & board (of course, you know I’m exaggerating… but, you know what I mean). Their chore money was their mad money. They hate it that they don’t have it now. I tell them… go down to your dad’s house and do chores for him. Get him to give you some money! He makes them rake leaves and pull weeds all afternoon and gives them $5. Personally, I think that my able bodied 5’5″ daughters are more than capable to help out around the house and not expect money for it. If they mess it up, they can clean it up. But, remember… they’re older. When they were younger, I did want to teach them the value of a dollar by making them earn it. I still do.

    I do give them money for good grades at report card time. Although, this money is put directly into their college savings accounts. These bank accounts aren’t huge, but about $600 a piece, now. The twins have the option of depositing other monies into their savings, as well. Colie likes the idea of earning interest on her money, so she is always wanting to deposit her birthday money in there.

    If the twins now really want something (like the newest “New Moon Movie Companion Book”), they have to do extra chores to earn the money for it. Colie is washing the car, today! Dee broke her ear phones and is washing the dogs to earn the new ones ($9.50 at WalMart).

    Even if I make good money again in the future, Lisa, I don’t think I’m going back to a hefty weekly allowance. They get sports, clothes, haircuts, books and all kinds of goodies all the time. They are well taken care of and they need to learn to humble themselves and be grateful.

    I know you. You’re a good mother and you don’t spoil your children. You are reasonable. On the hamster thing… I say… you’re right by waiting for another shipment to come in. The entire thing reminds me of the Cabbage Patch thing. Remember… one day sooner rather than later, the little hamster thing will be tossed to the bottom of the closet and forgotten forever. $3 is the right price!

  19. P.S. Visit my blog post today to see the MONSTER bug that I found last night!

  20. This is such a great question, and I’m interested to see what others are doing. We don’t give our kids an official allowance yet – but will probably start soon. We have general, unspoken rules. We’ll always buy our kids books, and occasional toys, but most of their stuff comes at birthdays and on Christmas. They could care less about clothes and shoes, so that isn’t an issue luckily.

  21. Thinking back on my own experience, I still feel guilty because I did not hesitate to ask (or beg!) for a lot of things my struggling parents could never afford. But they never wanted me to know (probably so as not to scare us or make us anxious) how hard it was for them financially. To me (now), I think this was a mistake. Because I think (or hope) that I would have learned a lot of lessons from knowing how hard it was for them just to get the mortgage paid and get food on the table, and given that, the latest whatever fad wasn’t so important. (except…. the way kids are mean in school if you don’t have whatever it is, it seems critically important!) But I still think I could have gotten some perspective and been nicer if I had only known!!!

  22. I’m a tightwad raised by tightwads. My hubby and I live on half our income and I have zero credit card debt. (He’s still paying off his ex-wife’s five years later). He has a teenager, and we live in Northern California “wine country,” so talk about materialism! We both agree that we’re raising an adult, not a child, and it’s our job to teach her money management skills. Where we don’t always agree is on what’s a necessity and what’s a luxury. Mom pays for the pedicure, stepmom buys the new dictionary and the vocab flash cards. I’ve made it a point to keep her in the loop on our budget process and our charitable pursuits.

    1. We don’t give an allowance. If she wants something, like a school trip, she will tell us and make a case for it. We provide a bus pass, laptop, and cell phone – which she never seems to have turned on. Mom bought the iPod. We don’t watch TV, and I think this makes a *major* difference in attitude.

    2. Chores will be done on command and respect is non-negotiable. We also expect – and get – a very high GPA. 3.5 so far!

    3. The consequence of misbehavior is an immediate lecture. Further non-compliance would lead to a stringent policy change. We are the iron fist! Bringing money into discipline issues would just be confusing.

    4. This is why we don’t give an allowance – the concept of “mad money” is tremendously destructive to kids. It’s just a very bad idea to teach that Spending Money on Frivolous Things is Fun. In reality, when your kids move out on their own, they’re going to be broke for a while. They need to understand that money is hard to earn and has to pay for boring things first – like rent and the dentist bill. Mad Money is the fast lane to a lifetime of debt.

    5. Our gal can spend birthday money or any extras on whatever she wants. In practice, she tends to hoard it in a jar. Her thrills are playing Dungeons & Dragons with her friends, reading manga from the library, and drawing – all pretty much free.

    We are a close family. We have dinner together every night and we read together for 1-2 hours. We laugh a lot. We’re happy to have a remarkably non-materialistic kid – our biggest problem with her tends to be convincing her to throw out her holey old shirts and wear the new ones.

  23. Great food for thought here! I’m taking notes, as my daughter is only 19 months old. 🙂

    Just wanted to say that I’ve also read several places that giving a reward (allowance) for a chore is a no-no. It removes the intrinsic motivation by imposing an extrinsic motivation, or something like that. Hey, I’m new at this!

    So I don’t think we’ll do an allowance. But that’s probably not much help to you in your situation, so I’ll shut up now. 🙂

  24. Give your kids everything you can it will make it easier for them to get a job later if you say no to them makes them think everyone will say no

  25. As a child I had an allowance and it was not tied to the chores. It was made clear to me, however, that I was expected to pull my weight around the house. It was just my Dad and myself, and the saying went: “Ask yourself who is going to do this if I don’t? If the answer comes back Dad, the answer is wrong!” I did stuff like feed the dog, do the dishes, help with the laundry and mow the lawn. It taught me how to do different things, responsibility and self-sufficiency for which I was grateful when I went away to college and had to run my own apartment.

  26. […] advertising and media images they are bombarded with on a regular basis, about teaching them about money and morals and manners and how to be charitable.  The book showed me the reasons why I’ve […]

  27. hello! 🙂 i’m 13 right now and my mum gives me $20.00 a week and i put $10.00 in my saving and $10.00 to spend 🙂 this is my choice my mum says i don’t have to but… i do. about the cell phones yea i’m on my 5th. umm i do have a computer but its broken and its my sisters old one 🙂
    when i was 12 i got $5.00 a week so tell your daughter that! and my friend doesn’t get an allowance 🙂
    i hope this helps…please email if your need any more help!!!

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