Paying kids an allowance is always a hot topic among parents. To pay or not to pay? We pay allowances at our house and it actually resembles a little micro-economy! Being paid an allowance is a privilege and with that privilege comes responsibility. The ultimate goal in paying an allowance is teaching kids to be responsible for their own needs while building solid money management skills.
Giving your kids money as allowance must be tied to specific items that they pay for. The idea here is to transfer the responsibility of paying for their needs from the parents to the kids. There is a power shift when kids are responsible for paying for their own needs; they become the decision makers.
Where to begin the process of paying your kids an allowance
- Start when your kids are little and have a “family bank” where you record their “deposits” in a check register. This is when you start the conversations of saving vs. spending and wants vs. needs. Keep having this conversation, over and over.
- Have a list of jobs that spells out which chores are allowance based, meaning the kids are being paid to do them. Have a separate list of jobs that are not paid “allowance” chores but simply jobs that come with living in a family and/or community.
- Have an annual allowance meeting (our annual meeting is in June) so you can discuss raises, additional responsibilities (chores), and what else the kids get to pay for. As their allowance amount increases, so do their responsibilities.
So, what do my kids pay for? Pretty much everything, except shoes. And the best part? They never ask for money although there are occasional meetings called to make a plea for a raise! I hadn’t thought of this being a benefit to paying allowances but it definitely is.
Bottom line: It is much better for kids to learn money managing skills when they are still living at home, under your loving guidance. Deciphering between wants and needs in life are skills that we need to be teaching our kids.
Do you pay an allowance? How often? Does your system work?
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