Giving your kids an allowance
no question that giving your kids an allowance can be beneficial. Patrick Doyle,
an investment specialist in Toronto, says giving your child an allowance can teach
him to budget and manage his money, respect the value of a dollar, learn to be
independent and develop a feeling of self-sufficiency.
can also directly benefit you, the parent, in that it will save you the headache
of regularly deciding what your child can and cannot buy. So, how do you decide
how much to give and when? Here's a look at everything you need to know about
giving your kids an allowance.
or for nothing at all
Whether to give your child an allowance in exchange
for reward-worthy behavior or just for being a kid is controversial.
Doyle, for one, thinks that allowance should never
be given for nothing -- it should, for example, be given in exchange
for household chores. The idea here is that the child earns her
money, preparing her for life in the outside world when she gets
Paul W. Lermitte, author of "Allowances
Dollars and Sense: A Proven System for Teaching Your Kids About
Money," sees allowance as a tool for teaching kids about money
and thinks it should be given freely, with no strings attached.
Furthermore, he doesn't think it should be withheld for bad behaviour:
"You don't not give your kid a book because he's being bad.
You discipline in other ways -- you take the TV away or you send
them to their room for a timeout. You don't take away their allowance,
because allowance is a tool you're using."
If you're stuck trying to figure out how much to give
your kids, Lermitte suggests paying them 50 cents for every year
of their age. "So, a 6-year-old would get $3 a week, and we
give it to them in coins," he says, which gives the kids a
better sense of how much money they're getting.
and the issue of loans
As for when to dispense your child's allowance,
make sure it's not Friday night, because there's too much temptation to spend
it all on the weekend. "If you give it to them on Sunday night or Monday,"
says Lermitte, "they have that money sitting in their bank accounts and little
wallets and purses all throughout the week, and that gives them an idea of saving.
And so when it comes up to the weekend, they've had time to talk about what they
want to spend their money on."
Another tricky issue is
deciding how to handle your child's request for a raise.
Laurence Harris, a professor of psychology at York
University, lives with his wife and two of his children, Lucy, 16,
and William, 13, in King City, Ont. Harris and his wife have always
had a system in place when it comes to teach their kids and money,
which Harris says should work, but he isn't convinced that it has.
system includes giving their kids responsibility by asking them to work within
a budget. But Harris admits they could be stricter about making them work within
their limits; he and his wife often lend them money and allow their kids to go
into debt to them when they can't afford something they really want on their own.
says small loans from parents are OK as long as children understand the concept
behind loans. He agrees with the idea of loans because they are part of our adult
lives, such as when we borrow money to buy a car or a house.
If your kids
ask for a raise, Doyle says you should try to make the situation mimic a real-life
experience. "Ask your child to explain why he is deserving of a raise,"
Good grades pay
their regular allowances, Harris's kids also get $10 for every "A on any
school assignment, as long as a teacher writes the A," says Harris. "And
$100 for every A on an official report card."
Harris says William has made about $200 for his As
in the past two years, while Lucy cleans her parents out regularly
(she got all but one A on her last report card, totalling $800).
Harris realizes it is controversial to reward his kids with money
for good grades because he does want them to be self-motivated.
in my defence," says Harris, "this was largely a last resort to try
to get William to do any homework. Then Lucy needed to be offered it too to be
fair, and she knows this. She often doesn't even bother to claim." Harris
and his wife hope William will get in the habit and continue to work hard even
when they stop paying him for good results, but that remains to be seen.
is opposed to rewarding good grades with money. He says allowances should never
to be tied to behaviour, such as getting good grades, or scoring goals in sports,
because that teaches children the wrong values. "If you tie things to money,
even chores, when they're small, it's not a big deal. But when they're 10 or 12,
they do nothing unless they're paid. They become greedy and self-serving people."
Whether or not you give your child an allowance, Nathan
Dungan, author of "Prodigal Sons & Material Girls: How
Not to Be Your Child's ATM," writes that you should have frequent
conversations with your child about money. "It's up to you
to initiate the conversation and to set financial boundaries and
priorities and to teach healthy financial habits. Who else will
tell them to save up for that big purchase, to wait a few weeks
because it might go on sale, to consider getting more value with
an off-brand, to 'just say no' to another pair of shoes?"
Saibil is a writer in Toronto.