August 18, 2014

Allowance: Money without Work

How Giving An Allowance Can Instill in Children a Willingness to Work and Serve
(Ok, it's only one SMALL aspect, but hear me out)

Should You Give Your Kids An Allowance Or Should Money Be Earned?
What Do You Think?

My son turns 3 this week, and we're starting allowance.
I'll be testing my allowance theory and sharing the successes and failures of the journey in future posts.

Yes, I believe in Allowance.
Allowance, as in money that's given, not earned.

Does this surprise you?
It surprises me.
I am a believer in hard work.
I used to think that giving kids money they didn't have to earn was simply a great way to teach them that they don't need to work.
I also feel that when kids are given things rather than working for them, they don't learn to manage money.

So, why allowance?
I also believe that there is too much emphasis on money in this world.
Money is often a source of control.
Too often, Money = Power
Too many kids (and adults) only want to work if there's money involved.
If Work = Money and Money= Power/Control, why serve?

Here's my Suggestion:
Give your children a small allowance just for being part of the family.
Not because they're good kids, not because they're hard workers, just because they need to learn how to manage money and spend appropriately.
Give them a small enough amount that they'll still want more, but give them enough money to teach them about money. 

Give them jobs that they do just because they're part of the family.

We started jobs at age two:

Taking his dishes to the sink after meals
Putting away his toys
Unloading his dishes and other plastic items from the dishwasher and putting them away
Putting his dirty clothes in his laundry basket at night.

He is learning that work is a responsibility whether it's financially profitable or not (this promotes service).
He will understand that even when he begins to make more money from an employer than he can from mom, he is still expected to contribute to the household.
He is learning that fun is great, but that work is necessary. 
I praise him instead of pay him, and he values that praise.

When kids want to earn more money then they can do more jobs
How you manage this is up to you.
You could make a list of jobs and the amount you are willing to pay for those jobs. 
They can come to you and propose a job they're willing to do and you can negotiate the pay rate.
They can present an amount they would like to earn and you can give them a list of jobs they need to do to earn that amount.

How do you motivate kids to work if they're not getting paid?
If they don't do their jobs, rather than not getting paid, they lose privileges such as playing with friends, TV time, video games, they lose toys that aren't put away, driving privileges, or whatever works for you and your child.

Interested in more about Kids and Money?
Read my post Six Things My Parents Did Right When Teaching Me About Money
I also HIGHLY recommend this book for a more in depth look at teaching kids of all ages about money, it's an easy read, well written, and has great examples.
And follow us as I share about my little golfer's money managing adventures.

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