Allowance for Children

[Mighty Frugal]

Do you do it? Did you do it? Are you for it or against it?

My goobers are now 5 and 6 and know the value of a dollar. I don't give them an allowance but would like to begin in the not to distant future.

It won't be tied to a chore (I agree with that train of thought) But I feel that a dollar for each year is too much ($5 and $6 each week) seems too much to me.

I think about $4 per week for each of them is sufficient.

Ok...enough babbling...the question I need answered is:
Can they spend their own money as they see fit?

I understand I should ensure they save some for long term goals, some for donations, some to keep their mom in the laps of luxury when she is a frail old woman but aside from that, can they do with the remainder as they see fit? Or should the parent have some say in it?

My dh is all about bossing them around and telling them what they can buy with their money. I am more 'it's their money, let them spend it as they see fit'

But, what if they are like me (on my 7th birthday my mom told me I could spend my $5.00 on anything I wanted. I promptly dumped a garbage sized amount of candy into my skirt, held the sides and declared this is what I want to buy. My mom made me put it back and I had to buy school supplies-dang)

So if your kid wants to buy their weight in candy with THEIR money...or those rip off bubble gum plastic toys will you let them?

Help!

[artist]

My son didn't get an allowance until he started to have some real expenses and was old enough to understand how to save and plan for things. I think he was about 9 years old at the time. Things like baseball sign up, music lessons, gift giving etc.. At that time we gave him an allowance that covered his expenses and required that he budget the dollar amount carefully. We gave him the dollar amount each month and he had to plan for it, look to the month for when things came due, anticipate the need for things like new guitar strings etc... We also built in some "spending" money but not much. He didn't really have a need to spend money and we don't believe in teaching children that it is ok to spend money simply because you have it.

We did a separate clothing allowance starting around the age of 12, that would be enough to cover his basic needs for the year. He quickly learned that by shopping clearance racks, buying more basic type items and purchasing clothes second hand, he could save some of that money and purchase one or two special articles of clothing that he wanted and still meet his budget and get everything on his list of needed clothing.

We don't purchase wants outside of birthdays and then we only buy him one thing that he wants. We don't exchange gifts at Christmas. So he learned the value of delayed gratification and to really understand the difference between wants and needs.

Ds is going into his freshman year at college this month. He saved up a good amount of money to pay for school and even sold off some possessions to help pay his tuition. He learned the value of a dollar and that materialism isn't something to strive for.

[Stella]

My girls, who are 6 and 7, get $4 a week. I let them spend it on what they want as long as it is used in keeping with household guidelines.

What keeps them from spending it all on candy is that no matter who buys the candy, I get to decide how much of it they get at any given time because I am in charge of making sure they eat a balanced diet. So they can spend $5 on candy and have a small piece of it today, a small piece of it tomorrow, a small piece of it the next day, etc. and suddenly stockpiling candy seems like a boring way of spending their money. Similarly, pop isn't something they are allowed to have on a regular basis. If they wanted to buy it, I'd let them have one can as a treat and the rest would be saved for a later time.

The last two things bought with allowance and a combo of allowance and birthday money were pretty twirly tutu-like skirts and snorkels. They actually get a ton of use out of both of those. Next week's allowance is going towards their Party Club dues.

[wallydraigle]

An idea I heard recently and think is brilliant: kids get a very substantial allowance, but they have to buy their own stuff. I think you could start this off gradually so your five-year-old isn't naked but swimming in candy on the first week. :) Say, at age five, he can have enough money each week to cover semi-necessary thing X and a few treats. It's up to him how he spends it, but if he blows it all on candy, he doesn't get X. Or he gets a really lame version of X with the $.32 he has left. The person I heard of this from said that the kids she knew who grew up with this turned out to be very money-savvy.

This idea really appeals to me. I'm the youngest of five. My parents were wonderful in a hundred different ways, but I think by the time they go to me, they were too tired to teach good money management skills. I'm learning as an adult, and it is downright painful at times. :P

[Mrs-M]

We've never really done the allowance thing in our home. Instead, we were always gracious in helping whoever out (at the time) with whatever they were wanting, as for the rest of the time we'd just hand over a few dollars (here and there) for little things as we seen fit/when they asked.

Our kids are fairly spoiled in the cash department, courtesy of both sets of grandparents, and a portion of the money they receive has to be saved and put away. When our girls reached age 11-12, they both started babysitting, which eliminated any further need to help them, other than when it came to special purchases/school things (clothes, etc). With our oldest son, he always cut lawns, shoveled snow for neighbours, and did odd jobs for people for cash, so the same went for him.

I like the idea of allowing kids the freedom to do with their money what they choose, but a side of me likes to think that a little restraint imposed upon them at an early age helps direct them and teach them control which provides them with an appreciation for savings down the road.

[Mighty Frugal]

Thanks to all of you! Stella I love the idea of handing out the candy a little at a time-good point and one that I'll follow should my child follow in my candy-loving footsteps. My boys do have money in their piggy banks from found money (I swear my eldest is a magnet for coins) and money they get from grandparents, etc (Christmas and b.day money gifts I quickly stash and it's in a bank account for them-I know, I'm a mean mommy but they don't even know about it)

At one point they were going to pool all their money (80 dollars) to buy a really cool marble run. But in the end decided to blow 10 bucks each on other toys (sea monkeys and a cheaper but still fun marble run)

Often on the weekends I will take them to a dollar store and allow them to pick just one toy. Their choice. And when we go to our discount movie theatre we first go to a candy store and I allow them to buy one treat under 2 bucks. So they know when I say 'nope, that costs 3 bucks' that they are to put it down and find something they can afford.

I want them to have confidence when it comes to money. Confidence in their power to earn it, spend it and save it. I grew up very poor-never had it (hence the skirt full of candy) and now as an adult rarely take financial risks due to the fear of 'being poor' again. Just opening my cupboards and seeing food keeps me feeling secure. I never want to be poor again.

I find it a fine balance with my kids to teach them the value of a dollar and yet, allow them to feel secure. I always tell them that we have enough money to take care of all our needs so they are not to worry about us being homeless, etc (my childhood fears)

I think I'll talk to dh tonight to get this ball rolling.

[Rosemary]

My 8-year old gets $2/week and is expected to do her chores, though they are not specifically linked. She does them, generally without complaining. Basically, it's all part of participating in the family. I reduce her chores during the school year because school is her main 'job,' but during the summer, the various activities take a lot of my time and so she has to help out if she wants to do those special activities.

I don't tell her how to spend the money, but she is not allowed to buy candy with it. It wouldn't cover the related dental bills! :) But generally, she gets so much candy on holidays that it lasts forever anyway. I do talk with her when she's making spending decisions though, just to help her think through things - for instance, if she's told me that she is saving for X, but wants to buy Y at the store, I remind her about X. Or if she is looking at something we'll discuss how it was made and sometimes she'll decide that she can make a substitute that would suit her needs better.