Do you give your kids an allowance?

[Cujobunny]

If so, how old are they? Is it reliant upon chores or responsibilities they are expected to uphold or do they get it no matter what? How much do you give? Do you let them do whatever they want with the money?

If not, why?

Curious

[Alyantavid]

No. We give our kids the chance to do special jobs where they can make money and we buy them everything they need. If they want something beyond that, they can save up their job money and buy it.

My 8 year old loves "working". My mom or mil will sometimes hire him to help do something. But he knows he doesn't get paid until it's all done. I just think it's better to earn money than be handed money for doing things around the house that they should be doing anyways.

[lotusdebi]

My older son started getting an allowance when he was 5. We stopped for a few months when he showed irresponsibility with the money, and started back up when he seemed to have matured. He gets $1 for each year of age, so he currently gets $7/ week, but will get $8/ week once he turns 8.

He's expected to clean his bedroom and his bathroom when he's asked to, help out with his little brother, let the dog in and out when needed, feed his fish, help keep the rest of the house clean, set and clear the table when requested, take care of his personal hygiene, put his laundry away and put his dirty laundry in the hamper, make and change his bed upon request, and do his homeschool work. He's also expected to generally follow directions, respect people and property, and keep us aware of his location.

He's supposed to check with us before spending his money so we can advise him. He's allowed to spend it on video games, junk food, toys, etc, but we wouldn't let him buy ice cream right before dinner, as an example. And he wouldn't be permitted to purchase things that we believe are inappropriate for him to have (like an R-rated movie).

[philomom]

Allowance here is merely to learn how to spend or save.

Everyone who lives in my house contributes to its care. Even my breadwinning dh can be seen doing his share on nights and weekends.

I have a friend who tied allowance to chores and her kids quickly discovered that it wasn't worth the hassle. Their mom did the chores and bought them stuff anyway. Lesson learned.

[OTMomma]

My dd is 7 and gets $1 a week, its not really tied to chores, though she does have to take out the recycling and set the table. She can earn extra money for helping with jobs around the house, and she generally gets a "bonus" with her allowance for those. I like have the small base allowance not be tied to chores, so its more about just learning some basics about saving and spending, plus my parents like to give her money at times, so she has spending money of her own. So far, I've never told dd she couldn't buy something, but we have talked about waiting for things to be on sale, or getting a good deal.

[fritz]

We started giving DS $1 a week when he turned 5 years old a few months ago. It has nothing to do with chores and everything to do with learning how to manage money.

I actually wanted to give him a lot less per week (cheapskate that I am), but DH argued that DS needed to be able to actually buy something in a short period of time (his example was that candy bars nowadays cost about a dollar; if DS had to save up for a month just to get a candy bar, DS wouldn't really see the point of the allowance if there was no opportunity for instant gratification).

So far DS has saved all of his allowance b/c he really wants a particular Lego kit (he's half way there). We did let him choose what to spend his birthday money on, and he surprised us by what he chose (a 1:24 scale model of the DeLorean from Back to the Future Part I--his favorite movie).

We buy him presents for birthday and Christmas (and those usually include a big Lego kit) and little things to keep him occupied on our road trips, but we don't flood him with things. His having an allowance now gives him some control over what he gets, so not everything is relegated to the Xmas or bday wish list.

[Leersia]

Our kids just turned 8 - they get $3 a week for allowance, and it IS tied to helping around the house. When they turned 7, we told them that we needed their help, it was time to have regular chores, and they could share in the household $. So far it has worked fine for us. They get the work done, and they are both good about saving (one might be considered a "miser" - lol). If they put at least $1 a week into long-term savings (i.e., retirement), we match that $1 for the same account. We read them a kid's book about compound interest, and they asked to have IRA accounts.

Since our kids have their own money, they are expected to replace things that they lose or break through carelessness, like swim goggles, the biggie around here. They hate that, and to it teaches them to be a little more careful with their things.

[lotusdebi]

Originally Posted by Leersia

Since our kids have their own money, they are expected to replace things that they lose or break through carelessness, like swim goggles, the biggie around here. They hate that, and to it teaches them to be a little more careful with their things.

We do this too. It has certainly made a difference!

[Evan&Anna's_Mom]

Both of my kids get an allowance -- $1/wk/year of age (so the 7 YO gets $7). We started when DS was about 7, which means that DD was 4 and probably too young but it seemed best to do the same general thing with both from a fairness perspective.

It is not tied to chores or expectations and is never taken away as a consequence. Though its not uncommon for me to not give it to them out of pure forgetfullness. :-)

Since the idea is to teach them the value of money, savings and budgeting ther eare some guidelines we give about spending it. They are expected to put 10% into a "share" bank that they use to contribute to things at church or other charitable things (just like we try to tithe as well), and 10% into a save bank for long-term savings. The rest they may spend as they please, subject to parental veto of things that violate our values (e.g. DS cannot buy a toy gun or a video game that we say "too violent" to).

They get a fair amount of money and thus I don't buy treats or toys outside of gift-giving occasions. If they want candy at the grocery store, its their money. If they want a new toy/video game/webkins, its their money. They have learned not to even ask about something special if we are out shopping. We rarely have begging "can I get this" exchanges in the store, which I really love. If something gets lost or damaged due to their clear negligence, then it is up to them to replace it.

[lilmiss'mama]

Originally Posted by Leersia

If they put at least $1 a week into long-term savings (i.e., retirement), we match that $1 for the same account. We read them a kid's book about compound interest, and they asked to have IRA accounts.

Wondering what book you were talking about?

[karemore]

Everything I've read on raising finanically healthy kids recommends giving them an allowance. We started giving DD an allowance when she wanted money for the collection plate at church. She got fifty cents every sunday morning when she was 3.

When she was 4 she was obsessed with the ice cream truck, so we upped her allowance. She then received enough for the collection plate, and for one ice cream a week.

She saved her allowance all winter for our florida vacation this April. She was allowed to spend it on anything she wanted, and ended up bringing most of it home.

Helping with the upkeep of the house is completely unrelated to allowance. We all do what we need to do because we all live here.

[Punchy Kaby]

We give 4.5 YO DS $5 a week. He gets it no matter what, it is not tied to chores. He is expected to do chores, and sometimes the neighbors give him money for 'helping' them with chores. He is free to spend as he wants. We wanted an amount that he could save to get toys/things that he really wanted. The allowance has eliminated the nagging to buy him anything at the store. He is learning a lot from buying his own things: he is starting to understand that numbers are prices and he has a concept of what things cost. He also understands when we tell him things are expensive and that we cannot afford to buy everything we want. We will introduce a bank account when he is a bit older. He saved for 8 weeks to get a pair of light up shoes that he wanted (he already had 2 pr of shoes that fit.) I was impressed with his focus!

[geekgolightly]

DS, 6, received a 5/week allowance. If he saves it for a week, he received 6$ for the following week. We do not buy him any dvd's, computer/video games or toys. If he wants something like that he saves for it.

We buy books and board games for all of us to play together.

I like the Roth IRA idea! I'd like to know the kids book you read about compounding interest.

[Leersia]

The book that I read to the kids on compound interest was called "Rock, Brock and the Savings Shock". They are twins, one saves and one spends, and . . you know . . .

http://www.amazon.com/Rock-Brock-Sav...7096968&sr=1-1

[marieangela]

We have a 7 year old and an almost 5 year old and have been thinking about starting with an allowance. This thread has been helpful. One question, though - where do your children keep the money that you give them? My boys both have wallets, but my almost 5 year old tends to lose things and leave them in strange places. The also both have piggie banks. I'm thinking I should maybe come up with some other place to keep money to save and eventually spend?

[One_Girl]

My dd gets a dollar a week and is free to choose what to save to spend it on. Her allowance isn't tied to household chores. Her chores aren't a choice so I am not going to tie money to them and allow her to choose to go without the money, my friend does this with her son and he hasn't even cleaned his room or the toys from the living room in months because he would rather just not have the money. I am not willing to live like that. I let dd do extra chores for me for a quarter. Sometimes she chooses to save her money and sometimes she gets a matchbox car when we shop on Sundays instead of the dollar. She has a piggy bank she puts all of her money in and she takes it out when she is ready to spend it.

[Leersia]

Re: where to keep the money - I think that this year we'll move away from a cash system and move to a ledger (where I just right down what they get and what they spend), sort of like our own system of electronic credit and debit. I never have the right amount of cash on hand, and they do tend to hoard cash and them misplace their wallets . . .

Also, re: tying chores to allowance - the only reason that I do this is because of the personality of [one of] my children, let's call him a "stong-willed" child - lol. One of my twin boys aims to please and likes to help - he gets his stuff done, and he gets an allowance, and they are not really related. My other son hates to be asked to do ANYTHING outside of his own agenda and will drag his feet and whine and even cry the whole time, unless there is a logical consequence for this. He is extremely motivated by money and so, for him, not receiving his allowance if he shirks his duties (or makes life miserable for me by needed to be hounded) is a solution that works for us. Neither of my kids has ever had occasion to have their allowance withheld, luckily. I rarely buy them anything and they know that their allowance is all their purchasing power.

[velochic]

Originally Posted by Leersia

and they asked to have IRA accounts.

Originally Posted by geekgolightly

I like the Roth IRA idea!

Actually, you have to be earning a documented income to open an IRA. That doesn't apply to most kids, unfortunately. Just thought I'd mention that.

As to the OP... we don't give an allowance to dd, 8. We all buy what we need and sometimes want. She has money she keeps track of in a Vanguard Mutual Fund (it's a UGMA custodial account), a piggy bank at home, and a savings account at the credit union but the money is from gifts and from us (not as allowance). She's a penny pincher and either saves all of her monetary gifts or gives to/buys for charity. I've never seen her "blow" money. She is learning to save because we are not spenders and she is learning from us. I personally don't think that kids have to have an allowance to learn how to handle money. As with most things, they learn by example. I think we're pretty good examples as we only buy quality items that we have the money for and we carry no debt. I think that's the most important lesson and kids aren't going to get credit cards to learn how to use them, so example is the best teacher, IMO. It doesn't really matter if that money is given to them regularly (as an allowance) or not... at least in the earlier years. I may have a change of opinion when dd is a teen.

[Cujobunny]

This has all been very helpful. DH suggested we possibly start giving ds an allowance at some point, perhaps tying it to chores, or "big brother" type jobs (we're having another baby in February) but it didn't sit right with me- I have no problem giving him an allowance and teaching him to save up for what he wants (he covets things like other kids' Nintendo DS) but he LOVES to help around the house and I don't want him to start doing that only to get money! He's also aware that he has an education fund & money he gets for Christmas & birthday goes into that. Also when I sold off some of their baby gear I let them put the money in their piggy banks to save for a trip to Disneyworld.

[Leersia]

Originally Posted by velochic

Actually, you have to be earning a documented income to open an IRA. That doesn't apply to most kids, unfortunately. Just thought I'd mention that.

Yeah, that's absolutely right, your kids need to have "earned income". However, the IRS does not provide a very clear definition of earned income. Most experts agree that money that your kids earn babysitting and mowing lawns for other people is "earned income". But, can you pay your kids to do household chores, document it, and call it earned income? Some (not most) tax professionals say that this is a gray area with the IRS and that until they clearly exclude it, it is allowed. There is plenty of information on the internet for people who want to read up on the debate and decide for themselves whether it is worth it (depending on how much your kids "earn", they could have to file a tax return). Just do a search on "Roth IRA" and "kids". Some brokerage firms allow you to set up custodial Roth IRAs for minors with only $100 to start (Schwab).