Allowances can be a sensitive issue. Even my wife and I have different views on allowances. When someone brings up the conversation about allowances, the traditional understanding is that you are paying your child a certain amount of money in exchange for completing a list of tasks. This mimics the adult world where you go to work, complete a series of tasks, and get paid every few weeks. If you are not working you are unemployed and therefore not paid. Makes sense right? Great! End of discussion.
But wait a minute! Maybe it’s not that easy. As a father, I go to work to earn a paycheck for my family. But when I get home I don’t get paid to cook dinner, do laundry, clean the floor, mow the lawn, or do any household items. That is part of being part of a family. This is how my parents raised me. I had chores to do but wasn’t paid to do it. I was expected to pull my weight (given the appropriateness of age, of course) because that’s how a family unit works. Everyone has to contribute in their own way.
Right or wrong?
I don’t think there is a right or wrong way to deal with an allowance. I think it mainly depends on what your goals are. The traditional understanding of paying allowances for housework is seen as a way of instilling work ethic. Some people argue that tying an extrinsic reward to an outcome can undermine your child’s intrinsic motivation to be a helpful family member. However, my wife fondly reminds me that there are many very successful and well-adjusted adults who were given a housework allowance as a child.
My view, though wrong or wrong, is slightly different from tradition. I don’t see allowances as a way of teaching work ethics, but rather as a good personal finance lesson in a low stakes environment. In addition to the birthday and vacation pay they received from the family, my daughter receives a small weekly allowance (my son is still a little too young at this point). She still has chores to do, which she does diligently, but she is not compensated for those chores. If she doesn’t do her job, she’ll get paid anyway; But some other privileges or fun activities are restricted until the tasks are done. Ever since I introduced this allowance, I’ve seen their attitudes toward shifting money. She thinks twice about frivolous purchases when it’s her own money. There have been a couple of times that I’ve told her that if she wanted a toy she would have to use her own money and she changed her mind about buying the toy. There were also times when she bought something with her own money and then didn’t have enough money for something else. She was disappointed, but she is learning about opportunity costs and money is limited.
My journey to teaching my children about personal finance is still in its infancy and no doubt things will change along the way. But it’s important to me to have clear expectations of what it means to contribute to the household as a family member (based on age and ability), and allowances are a tool for teaching real money management skills while keeping the stake low. Over time, I can implement an “over-beyond” clause that stipulates that they can make extra money by doing more around the house outside of their minimum expectations. That can be a future topic.
In the future, check out Part 2 where I discuss paying a cash allowance versus a debit card.
As always, I want to encourage our readers to tune in. Let us know how you deal with allowances in your home. There are so many ways to do this.
Note: We are not the author of this content. For the Authentic and complete version,
Check its Original Source