My children are 9 and 7, and money topics are beginning to come up more frequently. One word that I keep hearing is "allowance." My children want to know what an allowance is and how they get one. They have classmates who receive an allowance, and they're starting to wonder what is wrong with me because I don't offer that "benefit" to them. So today I want to discuss kids and allowances. I'll tell you what we do and share the experts' recommendations.
If you're wondering what kind of mean mom doesn't offer her children the ability to earn an allowance, let me explain the reason behind my decision. In most cases, allowance is either a fixed weekly payout or earned for performing household chores.
I'm of the mindset that helping out with household chores is just part of living in the house — you pick up your bedroom, you help with the laundry, etc. These chores have always been tailored to the child's age and they are just part of our regular routine. I never wanted to tie monetary compensation to them.
Although we don't offer a traditional allowance to them, both kids receive money throughout the year for birthdays and other special occasions. They also have an open invitation to write a blog post for one of my websites and earn money for the post. Both children have the ability to learn about saving, spending and giving their own money, so I just haven't seen a need to institute an allowance. Perhaps this will change one day, but for now, our system seems to be working.
Now all of this got me wondering about what the personal finance experts say on the matter.
Both Suze Orman and Dave Ramsey want to ditch the word allowance. Orman prefers the term salary and Ramsey calls it commission. In other words, if you don't do the work, you don't get paid. Sounds like having a job! But it makes sense; as a working adult, if you don't work, you don’t get paid. This is definitely a great way to teach children about the value of working for money.
Maybe I’m on the right path with allowing my children to write blog posts for financial compensation if they choose to. They earn money for their work. Besides, writing a blog post also has an educational benefit as it helps my children work on their writing skills.