Hopefully my readers can weigh in on this question regarding allowance.
The Allowance Question
Our kids are 6 and 4 and we have started talking about whether we should consider giving them an allowance. Both kids definitely understand the concept of money, so far as that if you want to buy something that you have to pay for it. Our oldest definitely understands that you have to have enough money to buy something. He even gets the concept of debit cards, in that the money is in the bank, and that the card means that they'll take it out. We haven't gotten really into credit cards just yet, but that's just fine with me!
But, both of our kids love ‘buying things with their own money'. When there's a toy that they really want, they'll often offer to pay for it with their own money. And, they do!
So far the source of the money has largely been from birthday gifts, Christmas gifts, or other gifts of money, and so we've been thinking about adding an allowance.
- Are 6 and 4 old enough to give an allowance? (Initial answer: Yes, based on their basic understanding of money so far. I think it also opens the door for teaching opportunities).
- If we started with the oldest, should we start a smaller allowance? (Initial answer: I'm thinking yes but am open to thoughts).
- What would be appropriate amounts? (Initial answer: I'm thinking that maybe tie it to their ages, so $6 and $4 or something similiar).
- Should it tie to chores? Our kids are expected to do basic things like clean up their rooms, help make their beds, and such. I'm not sure if, at this age, it makes sense to tie an allowance to this. On one hand, you want to encourage them. On the other hand, I don't want money to be their sole motivation.
- Assuming it did get tied to chores, would it be that you earned the allowance if you did chores or if you lost the allowance by not doing them? It seems like a subtle difference, but it's actually reward vs. punishment, which are very different.
- Do you force saving or encourage it? Our oldest loves Lego and he always has his eyes on certain sets. He's very good with math and numbers, so I would expect that he'd have no problem saving up, but I'm sure he would also be tempted along the way to buy smaller sets or other things. And, our four year old is just starting to grasp savings. Just wondering to what degree you encourage it, or do you let them learn it on their own?
- What about giving? Is it too young to introduce the concept of giving? Do you make it mandatory?
As you can see, an allowance at our house would be something we would try to use as a learning tool and also to create opportunities for our kids to learn more about money. We also want to strike a balance between respecting that it's their money and that they can do what they please, but encouraging them to make good decisions with their money (or learn from the bad ones).
Readers, any thoughts from parents that have gone through or are going through this? Please let me know your thoughts and advice.