To Allowance or Not to Allowance?

When thinking of an allowance, there are many reasons this might be a practice you choose to employ. And depending on your children, their payment may not be in the form of money. 

So why allowance? An allowance can help children understand striking a balance between modesty, which in this context is all about restraint and materialism. When one earns something rather than it being given, the effort teaches perseverance, and the reward opens the door to wants versus needs - a difference that has a lot to do with thriftiness and prudence. 

While implementing an allowance, the parent will likely learn patience as children do not learn in a steady line. The parent will need to stay consistent. Sometimes this can be a more challenging endeavor for parent than child. Through an allowance a parent is also teaching generosity as giving is focused on generosity. 

If you are uncomfortable with the concept of money for an allowance an alternative is blocks of screen time or any other creative solution you think might motivate your child. In our household, each child comes up with three to seven chores based on their age and ability. Some are easy and some are a stretch. They are excited to do their chores based on their buy-in of creating the chores. The screen time, which we equate to money, can be used in lieu of money. For example, 60 minutes of screen time equals one dollar.

The beauty is you can do whatever works for you! There are no limits other than your and your child’s imagination. I do not have any strong arguments why a reward for work system is not a good idea to implement in one’s home with children. I think it is an opportunity to show by example how the real world works. 

If you are concerned your children may be displaying attributes of ‘spoiled children’, here are some clues:

·     They have few chores or responsibilities.

·     There are not many rules to govern their behavior.

·     Parents and others lavish them with assistance.

·     They have a lot of material possessions.

If any of these factors describe your children, it is not too late! A great resource for your allowance is the book “The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money" by Ron Lieber. There are other guides online that can help you navigate this area of parenting as well. Good luck! Your kids depend on your success.

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Rachel Namoff is a founding member of Arapaho Asset Management, a financial literacy expert, a professional Pilates practitioner and overtly happy and positive.