WAGES OR ALLOWANCE FOR YOUR CHILDREN?

George McGurn

October 20, 1999

In our Parenting Workshops last week we got into a lot of discussion about how to handle money issues with our kids. Two choices are wages or allowance. When you use wages you simply pay your children for services performed. If you work you get paid. If you don't work you don't get paid. It sounds practical and very simple.

At first most of the parents feel that wages is the best way to go. But wages can cause a lot of trouble. Let's say you negotiate with your child that he will receive $5.00 each time he cuts the lawn. Well, this week he doesn't need any money so he tells you he will pass on the $5.00 this week. Who is going to get stuck cutting the lawn?

Another problem with giving wages to kids comes when you ask your child to go downstairs and bring the laundry basket up. The child puts out her hand and asks, "How much?" You taught her the rule in the house-"No work, no money." The child then gives you back the same rule-"No money, no work." Do you really want to pay your kids money every time you ask them to help in the family?

One mother told me that she negotiated a deal with her daughter where she would give her a quarter each time she made her bed. One week her daughter had some extra money so she flipped her mom two dollars and said, "Here Mom, you take care of making my bed this week." Who should be making the bed?

As parents you have a family obligation to take care of your children and provide basic services for them. And children also have a family obligation to take responsibility for some of the household chores.

Kids should be rewarded for their chores with words, feelings and their privileges-not money. And if kids do a poor job with their chores their consequence should be different words, different feelings and a loss of privileges.

One way to avoid the begging and the whining for money is to give the kids an allowance each week that is not connected to chores. Giving each child a different amount of money for an allowance based on age is also a very meaningful way to cut down on sibling rivalry. The allowance shows the kids that they are in different leagues in the family. Probably the youngest will scream that it's not fair to get only .75 when his sister gets $1.00. But you can tell him that when he is the same age as his sister he will get the same amount.

It's amazing how much kids can learn about practical math when they have their own money. I have seen very young kids begin to read the weekly fliers from department stores looking for sale items and ways to get a bargain for their money. When kids buy with their own money they are very interested in how much change they are going to get back. To make sure they get the correct change they need to know about the 5% state sales tax. Kids usually are not interested in finding out about 5%. But if it is connected to the amount of change they are going to get back from their allowance they become very interested.

If Grampa sends $25.00 to your child for a birthday gift and you give the same child only $1.00 for an allowance, your allowance is not going to seem very important. An effective technique is to put the $25.00 in your child's personal bank account in his own name.

When your kids have their own money from their bank account and from an allowance you can negotiate a team approach to buying an expensive item your child may want. You can take some money from the child's bank account or from his allowance and then kick in with the rest.

When kids need extra money parents can come up with a household task like cleaning the attic and give them money for their work.

If you don't like the idea of giving your child an allowance, another way to stop the begging is to give your child a set amount of money before a trip. Then the child can buy what he wants without bothering you. And when the child's money runs out his shopping is over.

Parents always ask at what age should a child get an allowance. We usually say you should start when a child has an awareness of money matters. When should you stop an allowance? Most parents say that the allowance should stop when the child is old enough to get a part-time job.

And remember the department stores know when kids get their allowance. And they put those big plastic cans filled with gum balls and silly prizes right next to the entrance just to tempt the kids. And you know that when your child spends all his quarters on gum balls he is going to ask you for more money.

That's when you really teach about money matters. You then tell your child he certainly can have more money-next Friday when his weekly allowance will be given to him.