Do you give your kids an allowance? How do you determine what is an appropriate allowance for each of your kids? We have two kids three years apart in age, and so our allowance strategy is the older you are, the more allowance you get, and I think that’s the basic premise behind most families’ allowance structure. My thinking was broadly altered though this past weekend, when I had a great conversation with another parent, who happens to be a financial planner. It got me rethinking how we determine our kids’ allowances, and how we budget kid expenses.
My Financial Planner friend’s youngest is 8 years old. his middle child is 11, and his oldest just turned 13 – together he pays out $25.00 per week in allowance to his 3 kids. Hearing that put me to shame, and made me pray that our kids would never compare allowances! At the same time, after talking to him, and hearing his rationalizations, I think it’s time for my kids to get an incredible increase in allowances, but at the same time it will mean and incredible increase in responsibilities. It only makes sense.
His argument is pretty simple. When budgeting, and looking at “kid related expenses” he realized he paid more than $25.00 per week out to his kids’ entertainment, or even simple requests like a candy bar at the pool, or a toy at the store. In giving his kids’ these higher allowances, it has become a lesson in economics for them. They learn to budget their money, and decide what they feel is worth the expense.
With the increase in allowance, of course came an increase in responsibilities for each of my friend’s children. If they do not do a particular chore, their allowance is automatically cut in half! Now that my kids are older, they can definitely handle the increase in responsibility, and having a monetary value attached to each is an incentive I know will work with them.
Giving our kids a weekly allowance, and putting a monetary value on the chores they do around the house gives them financial-life lessons, and an added sense of responsibility. In return, we will have a little bit cleaner house. (Momma will be happy!) Plus, our kids know that money is tight, but in earning their allowance, helping out with things at home and buying some of their own “treats”, they will develop a sense of being able to contribute to our family’s well-being.
I’d love to hear your thoughts about kids’ allowances!
) We see a first run movie, maybe, every couple of years. Don’t want to jinx anything, but I think both my PC and my laptop are over 5 years old! Excited about getting a new lower end digital camera with video capability for my birthday this year, but we still haven’t gotten a stand alone digital videocamera.
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