Last week, I told you how my family dealt with the topic of allowances (Spoiler alert: They didn’t!), and gave some possible outcomes of that treatment. I’ve talked to a couple parents that do the same thing for much the same reasons. But there are other sides as well.
The most popular stance is, “pay allowances, but tie them to doing chores around the house” which does seem to make sense. The rationale here is simple. We are training our kids to understand that they earn money when they do a good job.
When asked, this is what Dave Ramsey had to say about allowances back in December of 2010:
I don’t do allowances for anyone. The word “allowance” sounds way too much like welfare to me. We put our kids on commission at an early age. If they worked, they got paid. If they didn’t work, they didn’t get paid. We put a little dry-erase board on the refrigerator and listed all the jobs they had to do during the week, with a dollar amount next to each one. When you did a certain job, you were paid that amount.
Keep in mind, though, kids shouldn’t get paid for every little thing they do around the house. There are some jobs they should have to do just because they’re part of the family, or because mom or dad tells them to do that job. Some of these jobs should have a higher purpose, too. As a parent, you want to find as many teachable moments for your kids as possible.
Once they’ve earned their money, sit down with them and divide it into three separate envelopes: one for saving, one for spending, and one for giving. This way, they get to learn about these three important things while they’re learning how to work.
Teaching kids that there’s an emotional connection between work and money is one of the best things you’ll ever do as a parent. If they learn this when they’re five, chances are they won’t be clueless and financially irresponsible when they’re 55!
Suze Orman says:
If you have children, and you give them an allowance, I think you’re making a big mistake. Here’s how I think you should do it: There should be a list of chores around the house that they just have to do because they live in the house. Anything above and beyond those chores- if they do it- oh, you should pay them to do that work! Forget the allowance, pay them for work. I want you to be money minded so that you can save more and worry less.
Now, I know that it sounds like they are saying not to pay allowances at all, but if you really dig in there, they aren’t saying any such thing. What they are saying is that you should peg their allowance to the chores or work they do around the house. There is some upside to this. Maybe you get your teenaged kids to mow the lawn, wash the cars, or do other things that you might pay someone to do anyways. Maybe they learn a valuable lesson that will stay with them into adulthood. That sounds suspiciously like what we want for our children, right?
So is there any down side to this idea? Well, look at this possibility. If you pay your kids for some chores and not for others, which ones are going to get done? Even if you say ‘all’, which ones will get done better? But then, if you pay for all the chores, indiscriminately, you run the risk of socializing your kid into believing that it is right for them to only do something if there is a monetary incentive for them to do so. If that isn’t a problem for you, then it do it!
While I’m not a huge fan of this method (actually, I think it pretty well sucks, if you really want to know my feelings), I can’t say that it doesn’t work when used correctly. I can also see the argument as it comes from a mother who doesn’t work outside the house, but counts on getting her spending money to do the things she needs to do. If she is getting paid in this manner, how can it not make sense to pay her kids in the same fashion? In fact, that argument is part of why I don’t like this method. Personally, I consider it work when someone gets paid from outside the family. I don’t like the implications of a man (and let’s face it, it usually is a man who works outside the house) who works outside the house paying his wife to take care of the house. I think that cheapens all the work that she does, and lets him off the hook to support her as he promised to do when he married her. When it comes to kids, you are paying them to contribute to the family dynamic. I don’t like what that allows them to not do.
Next week, we talk about the parents teenaged me would have wanted. These are the parents that just give allowances because they can! In the mean time, this reminds me of a pushy kid trying to get paid for the work he did at home. I generally call them twerps!