Should Your Kids Get Allowance?

Allowances, a set amount of money given to a child on a weekly or monthly basis, are a great way for kids to learn to handle money, set a budget, and save for things they want. However, there is debate on the purpose of an allowance and what is required of the child. Some parents except their kids to do chores in exchange for the allowance, others expect the kids to use the allowance for school lunches, bus fare, even cell phone expenses. Other parents believe that an allowance should be given just because the child needs some money and expect nothing of the child in return. Both sides have their proponents.

Some believe that treating an allowance as a wage for chores teaches the child that effort has financial rewards. Others argue that giving an allowance with no strings attached means the child has more time to focus on her "real" job of getting school work done. Neither approach is better than the other.

The allowance-plus model gives the child an allowance with no strings attached. If the child doesn't do chores or meet other expectations, the money is not withheld. Instead, the child loses privileges. The plus comes in when the child tackles chores above and beyond those expected. For example, the child might be expected to wash dishes, make beds, and walk the dog for free. If the child wants to make more money, she can do other jobs not expected of her. For example, the child might wash windows, stack firewood, or weed the garden.

The outsourcing model expects kids to perform their basic chores for free, but gives them the option of earning cash for doing other chores. If there are jobs to be done, the kids are given the option of helping and they are paid for the job. This model lets kids know that there are some things that are just part of being a family and that they won't get paid for every                            

Whatever approach you choose, kids should be expected to use their allowances for the extras they want. As they get older, their allowances should increase, and more should be expected of them.