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Should Your Kids Get An Allowance?

Most money experts agree that children should be given an allowance in order to learn financial skills at an early age. I disagree. Children should earn money just like we do. And, most importantly they must be taught what to do with the money once they receive it.

I speak on high school and college campuses monthly and to my astonishment, I meet young people who have never worked a day in their lives. At the age of 21 years old there are people in this world who still believe for some reason that money either really is grown on trees or that it magically falls from the clouds. There is a distinct disconnect between young people and the concept of earning money.

We have created a sickly bunch of young people. Their ailment? A false sense of entitlement. They’ve been poisoned by privileges afforded to them by parents who “don’t want their kids to go through what they went through.” If that be the case, we should use our experiences to empower our children with the tools and resources that will help them successfully navigate through this world; not give them a false sense of reality.  Duh. That’s what reality TV shows are for. Doing this doesn’t help them. It enables them. And, it robs the world of the efforts of someone who will approach life’s challenges with independent creativity; not be complacent with the comfort of knowing that mommy and daddy are always just a phone call away.

Allowance VS Earning 

A majority of the students I meet understand that they are in college to hopefully become productive citizens who earn a decent living.  The problem is, however, they really have no idea of how that whole process works. Why? Because for their entire lives they’ve been given money for things they should technically do any way (i.e. be respectful, clean their bedroom, empty trash, and earn good grades). On top of all that they receive annual raises for simply getting older. Eh, let’s see. . . When’s the last time you got a raise for keeping a tidy office, showing up to work on time or just having a birthday? . . . Oh, okay. Just checking!

    • What happened to just being good for the sake of being good? 
    • Why should anyone be paid to keep their room clean? You live there, don’t you? 
    • Pay for good grades?
      (Well, I got paid for good grades, but the reality is, I would have gotten them anyway. I was just that kind of kid. So, thanks, dad! All the money wasn’t necessary, but definitely appreciated!)

Here’s the deal with paying for stuff your kids should do anyway. Once they have other streams of income, like a part-time job or birthday money from grandma, they’ll draw a blank when you expect them to do chores at home. Why should they clean up for you when they just got “free money” for doing nothing? Duh.

Kids should earn money, just like you do. Sorry kids. Basic household chores are just your contribution to the family. It goes like this:

    • I feed you. You do the dishes.
    •  I drive you to school. You wash my car.
    • You walk around my house. You vacuum.
    • You asked for a little brother or sister. I gave you one. Now, you babysit.

See where I’m going with this?

Now, any task over and beyond doing basic household chores is where the earning potential comes in. As parents we take on the burden of having to get so many things done in any given week. What can your kids help with? Need someone to come in and help file papers? Do you need a closet or drawer organized? Are you doing some spring cleaning? Have your teenager take pictures of items for sale and list them on Craigslist. They’re on the computer all day anyway. Get creative. What do YOU need? We know they need money, but how can you teach your kids a valuable lesson AND get both party’s needs met?

Make Kids Responsible

Another downfall of this entire allowance thing is that many parents implement an allowance with no expectation for how the child should manage the money or what responsibilities they will have. In the real world, we don’t earn a paycheck and then still have the luxury of someone else paying our bills.

As parents we may be responsible for the basics, but kids who earn money should become responsible for the frills. Let me tell you how Marie used to do it. (Marie’s my mom, by the way.) Marie would tell me upfront how much she “believed” something should cost. I’m still not quite sure how she came up with her numbers. My assumption is they were based on her own budget, but nevertheless, if she believed it that settled it! Negotiations weren’t really allowed.

I digress.

So, let’s take a common item like a pair of jeans. Marie felt she could buy good quality jeans back then for about $35. Well, in my day, Calvin Klein and DKNY jeans gave you the “golden ticket.” Unfortunately, Mr. CK and Ms. DKNY were not giving up those goods for less than $70 a pop. So, when we got to the counter, Marie would put up her $35 and politely walk away. I’d have to shell out the rest. Talk about lessons that last a lifetime! This method quickly taught me how fast money could go when I was buying things just to keep up with the Joneses’. After every trip to the mall, Marie was fine. She spent what she wanted to. Nothing more. No hard feelings . . . on her part, at least.

The same principal applied when I wanted a pager. (I am so shamelessly dating myself right now.) Marie thought pagers were for doctors. I didn’t even have a diploma much less medical degree.  So in her mind, no pager necessary. I saved for my pager and paid the monthly bill. No mula? No paging. It was that simple. If my pager got cut off, my mom never “put something on it” or felt bad for me. I should have budgeted better. Period.

The article “Teens and Their Spending Habits” suggests that parents “make kids responsible for their spending. If your child has a cell phone, require them to earn the money to pay for the extras such as texting and accessories. If your child is of driving age, help teach them responsibilities of driving by having them pay for insurance and other incidentals.”

You are not going to kill your kids by teaching them how to be responsible with money. What are you protecting them from? . . . Real life? They need to know the importance of living beneath their means, giving, and saving. We can’t wait until they’re leaving for college to get the conversation started.

Our job as parents is to prepare our kids for adulthood. You won’t rob them of their childhood; you’ll teach them lifetime lessons that our broken school system will not! If not you, then who? And if not now, then when? Perhaps, when they move back in at 34, you’ll be more comfortable with teaching them how to earn money, budget and be responsible then.

That’s our Q to your A! Tell us what  you think in the comments below.
Do you give your kids an allowance or do they have to earn money?
What system have you found to be most beneficial? 
Patrice C. Washington

Patrice C. Washington

Known online as the Wisdom & Wealth Money Maven, Patrice C. Washington is author of the personal finance series, Real Money Answers, as well as creator of The Mindset + Money Master Class, a step-by-step formula to help you create the money mindset and skill set necessary for lasting personal finance success.
Patrice C. Washington

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  • Josie Grace

    Hi Patrice:) Congrats on Steve Harvey!!! I am a foster parent and I am obligated to give my 4 & 5 year olds and allowance of $5 weekly. At this age would you recommend that I make them earn it as well? I had to earn my money by mowing lawns with my dad so I agree but I don’t even know how to make a 4 & 5 year old earn it. How would you go about this? Thank you always:) -Josie Grace

    • Patrice Cunningham Washington

      It can be really simple stuff, Josie! Believe it or not, I used to have my little one clean window sills! Haha. It was the only thing her height, but it was over and above normal things like picking toys up which she had to be responsible fir anyway. . . I also noticed how mature she felt and she took ownership of it pretty quickly.

      Don’t overthink it. Just make sure it’s not something you expect them to do anyway or they’ll think they should be paid for every little thing. 😉