I keep things simple. My kids get $100 a month each. This covers their 7-11 treats, jugo juices, custom bike parts etc. But for most part that money is there to cover the trampoline parks, B-Line, C.O.P, movies etc. That was getting very expensive.
Turns out they don't need to go to these places every few days. They find free entertainment instead :-)
My older saves most of the money, he is saving for his first car. The younger one is a work in progress, but I can see signs of regret for being foolish with money and I hope responsibility comes next. They are 14 and 11 years old.
Should add that although their chores list is short, they do it when asked most of the time. But when they don't, withdrawing money is not used as way of discipline or punishment. We just don't let them out of the house until they are done.
What are peoples thoughts on the mandatory charity donation that some of you guys have said you make your kids do?
I feel like that wouldn't teach my kids how they should treat charity properly.
We've never made the kids donate allowance to charity, but we encourage them to donate some of their own money when their school has charity fundraisers. For example a couple of days ago there was a freezie sale for charity at their school, with $1 for a small freezie and $2 for a large freezie. We gave them the money for a small freezie and told them they were welcome to use their own money to upgrade to a large.
Location: A simple man leading a complicated life....
Exp:
Growing up my allowance was in the form of hockey tickets. One winter I got a bit mouthy/sassy and told my dad he should get off his ass and shovel the sidewalks himself. I missed a whole season of junior hockey that winter for my comment.
I don't like the idea of tying mandatory chores to an allowance.. They should learn that being in a family means having responsibilities and that they can't just choose not to do them one week because they don't feel like it and don't care if they don't get the money.
So taking out the garbage, unloading the dishwasher, doing your own laundry, etc are things I probably wouldn't tie to an allowance.
And those extra infrequent jobs I usually offered extra. "I'll give you $20 to go break down all the boxes in the garage and load them into the car". This is pretty unsuccessful for me though, my kid doesn't care about money or stuff enough lol.
I've seen some parents do enforced savings, i.e. half of the allowance has to go into savings.
As for the amount, I tried to scale it according to the kinds of things he'd want to spend it on and how long I thought was reasonable to expect him to save. Did I want him to save for 1 week for a $40 LEGO set? 1 month? 6 months? If the kid's money is more about activities and being social then maybe scale it according to that, what's a reasonable number of movies to see with friends a month and how much do they need to have to be able to do that and still have some money.
Part of it is education about just using money, part of it is fostering independence, part is teaching value and saving and delayed gratification.
We haven't done allowance in a while now, he seems to get enough as gifts to meet his needs.
I like this parenting strategy.
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When I was a kid, allowance was not tied to chores. I think it started around when I was 8 and my brother was 5.
Though it was not tied to chores, failure to do a good job meant that my brother AND I would not receive a quarterly raise in our allowance. I think we got something like $5 a month with an increase of $1 a month each quarter, which meant not getting one would be a loss of $4 each. My parent gave these reasons later on when I asked:
1. They pay for everything. The allowance is completely for frivolous things beyond what they provided they don't need to give us much money to spend on random crap. Plus we were poor and couldn't afford wasting money on things like this with bills to be paid.
2. The fact my bro and I both lose our raises was intended to have each of us keep each other accountable and have each other work together.
3. An allowance is completely unrestricted cash we could use and spend. I was a saver and I'd save half a year or longer to buy a Gameboy game. My brother would blow it all on candy.
4. My parents would give us budgets on "acceptable activities". They'd often give us a $30-50 budget for summer reading (to supplement a library card). We would literally do 3-4 month forecasts and keep track of the money we received as young as 10 years old. The money was only allowed to be spent on a proper book and if there was left over after we achieved reading 10-20 books, we could keep the rest.
Misc musing...
Spoiler!
I think the budget thing was actually just a ploy to get us to read things other than comics. The budget really wasn't much of a budget as it was more of a reward for doing something that strengthened our literacy. However, I seem to recall there was rarely much more than a few dollars left each summer. I guess it was mainly because there was something special in owning your own book as a child... and on occasion my parents would let me spend the money on something like a Calvin and Hobbes rather than a literary classic if I hit the halfway point early or something.
That being said, any money we received from others was placed immediately into a bank account (Christmas, birthday etc.) Parental discussion was required prior to us spending from that account. I recall vividly that one of those requests was for roller blades. My parents distinctively could not technically say no for withdrawal of that money as it was mine, but they sure would talk us out of spending it if it was something that was a bit silly. They'd also top up the purchase if the thing we wanted to spend on was considered worthy. This top up was often linked to special milestones or birthday/holidays.
I think I ended up with about $25 a month by the time I graduated High school at grade 12, my allowance ended, but my parents agreed to pay for any post secondary cost not covered by the RESP (Asian parents) and I could stay at home with room and board plus food covered while studying. My parents also did not like the idea of working and schooling at the same time, but I would not have any type of spending money at all unless I did short side jobs during school and/or saved up while working during the summer.
These lessons persisted into my adult life. Due to this system, I'm the type of scrimp and save to blow a significant percentage of my savings on something nice (as a child I loved mechanical pencils and stationary). I've focused on value ever since I was a child.
Now, some might think $5 is cheap. I can assure you, I wasn't worse off by getting such a low sum on a monthly basis in the 90s. Furthermore, my family situation at that time meant that at one point, we were poor enough to live in a trailer. Though our lifestyle improved after my father finished school (and our family of 4 no longer had to live off two minimum wage jobs), the allowance thing never changed. I think I had $600 in the bank and probably $150 in cash on hand by the end of grade 12.
I am enjoying reading this discussion though. Slightly different direction but similar... I do also want to know what some of your attitudes about credit cards is for kids.
A finance manager mentor of mine told me that he started teaching his kid about credit cards in Jr high (about 5-6 years ago) in a sort of pseudo allowance situation. I think was just some $500 limit card in my mentor's own name that he kept in wallet so he could monitor spending. Part of the argument was a paper trail he could use as a teaching lesson, the other was that he argued that most things these days are online shopping.
While cash is great as you can watch the amount decrease in your wallet, he mentioned the stories of individuals blowing up credit cards in 1st and 2nd year university as the reason he wanted to start early. However this mentor was a little bizarre in refusing to set up a bank account for his kid.
IIRC his system was:
1. There'd be a max limit the child could spend on the card each month. (I think all purchases went through my mentor anyways). I am not sure what it was, but I want to say $100 ish per month? He made a comment the amount was just barely enough to buy a video game or two per month.
2A. Child would have to look at the credit card bill, and keep track of what was left over that month (which could be used in a subsequent month). He would get his kid to do this in excel.
2B. Failure of the child to do this "work" to by the next bill would mean all accumulated excesses of the previous months would be wiped out.
3. The child was never handed cash. The child could request cash of a maximum of $20 from the accumulated balance available, but had to report what he spent the cash on.
(This apparently was to reduce the likelihood of the kid wasting money on candies etc at the checkout or something, but more than enough to go for fast food and tickets for movies could always be bought in advance. But I think a major part of this was this guy hated carrying cash)
Financial literacy, budgeting/forecasting and basic spreadsheet logic was the main reason my mentor did this method. I kinda like it. This and the online balance protection the credit card offers that a debit card does not.
Like some others there are chores that are just expected, and some things that pay.
We pay for a lot still, but my 14 year old knows he has to pay his cell bill, for example, so he better earn money.
It also gives me rare parenting wins where I say yes to almost all my kids asks for whatever they want to buy, even pump them up to shoot for the moon, then ask to see their plan to work for it. I haven’t said no, but I have tortured them a little. It’s great.
