3 Allowance Mistakes to Avoid (Part 1)

Isn’t it funny how most people have no problem doling out money to their kids. But when it comes to what we should require of our children in exchange for all that dough, the debate rages. Some people like the idea of an allowance that has no strings attached. Others think any money a kid gets it’s grubby little hands on should be earned. We tie money to behaviour. We tie it to grades. We tie it to chores.

From early on children receive mixed messages about money. They watch us spend money in so many forms and for so many reasons they form their own twisted and delusional ideas about the purpose and use of money. And if mom and dad are fighting about money, well, that brings it’s own lessons. They’re eager to soak up any direction a parent will give in terms of the role money will play in their lives. And if you point them in the wrong direction, they won’t know. They’ll just follow your directions to money hell.

Mistake #1: If you don’t smarten up, I’ll cut off your allowance! Money doesn’t work as a reward for good behaviour. Just ask any of the management theorists who have proven that money is not a motivator for adults. So why should it be for children? Good behaviour is based on an understanding of right and wrong, thoughtfulness, caring and consideration, along with myriad other positive attributes, all of which have to be internalized. When you tie money to behaviour you’re sending the message that compliance is the way to get money. All well and good if you want your little ant to know her place in the corporate hierarchy later on. But if you want a child who grows to be a confident and creative adult, compliance isn’t the lesson you want to teach at home. And money shouldn’t be your two-by-four.

Mistake #2: I’ll give you $20 for every A you get on your report card. Good grades are your child’s responsibility. School is his primary job, and good grades are an indication that he is doing his job well. If you provide financial reward for good grades, you are externalizing the reward. Instead, the reward should be internalized: the self-esteem and pride that accompanies having done well.

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Gail Vaz-Oxlade

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30 Responses to “3 Allowance Mistakes to Avoid (Part 1)”

  1. We take our kids out to dinner to a restaurant of their choice as reward for good report cards. That way it turns it into a celebration and family time. Report cards are always something we look forward too.

  2. When we were kids we didn’t get something for passing in school…we were SUPPOSED to pass…plain and simple….I am sure we would have gotten something though if we didn’t pass…LOL….

  3. Many times I have encountered parents who promise their children money or gifts or a special event for getting good grades. The saddest thing about such a promise is that some children are not cabable of getting an A in any subject, no matter how responsible they are or how hard they work. Getting a C may be the very best they can do. For others an A can be achieved with minimal effort. To reward children who get good grades doesn’t aid in developing character and to promise money to children who have no hope of achieving an A, or even a B, is cruel. On one hand you get the child who brags to classmates about all the money that’s coming for the A grades or about the new bike that’s been promised, and on the other you have the upset child who tried so hard but only got got Cs.

  4. Glen that is the same things as giving them money as Gail specified….no reward necessary, it is their job.

  5. When I was a kid and report cards came around, my Mom and Dad’s hugs and praises for a job well done far outweighed any tangible gift I would’ve gotten… but we did occasionally get pizza for dinner if both my sister and I did well 😉

  6. As a teacher, I agree with Gail about report card rewards. Celebrate achievements? Please do! But tying money to each A (or something similar) just isn’t fair. So kids can get an A in their sleep, while others struggle for a C. And what if your school switches over to anecdotal reports and drops the grades altogether? To me, going out to a restaurant together sends the message that you’re proud of your kids, you value education, and you value their strengths…depending on the family, that could be straight As in the sciences for one kid, and a comment from the teacher about effort and determination for another, and an excellent season on the basketball team for another.

  7. Well, I don’t do everything that Gail says :). We think it through and decide what’s best for us. A family meal out to celebrate report cards fits our lifestyle just fine. And with our kids getting older it’s an increasingly rare opportunity to have some family time and talk school. I want emphasis placed on academic achievement, this is one way we do that.

  8. I’m on the other side of the fence when it comes to reports cards. When I was a kid I got money for getting good grades. It was a great motivator for me. The higher the grade, the more money. And, who says it doesn’t help in developing character? My mother was a financial whiz and it was part of the way she helped my siblings and I learn to value money. Plus, the good grades I got made me feel good about myself.

    To each their own.

  9. I am trying to come up with a plan so she works for her allowance. we used to just give her $20 a week.. but due to a recent temper tantrum , we have decided she needs to work for it…. so maybe she can be in charge of the dog’s care? all the laundry in the house? supper each evening?

    not sure , she is almost 16 so she can handle those things.. and I am NOT paying her for things she is already responsible for , like her room …

    any suggestions would be great….

  10. 1. Allowance = Starts as Mad Money, then progresses to lessons on money management. (ie.. save 5-10% and 5-10% Charity giving. Plus saving up for specific want or need.)

    2a. Allowance = membership to family.
    2b. Family membership = responsibility to do chores and work towards good grades.
    2c. If 2b is not being met then 2a. can be put on hold.

    3. Extra money can be earned by going above and beyond doing specific jobs. (ie. extra work helping organize home business, help on a renovation, extra cleaning not within the guidelines of family membership.)

  11. Report cards, while supposedly standardized, are very subjective, and grades will vary by teacher, and also by student. It is unfair to “penalize” a child’s allowance if you have a teacher that doesn’t believe in handing out A’s. Technically, an “A” means that the student exceeds the expectations for that subject area, and very few should be expected to achieve that. I think that parents place too much weight on a grade that a child receives at the elementary level. It’s the learning skills that should be much more of a concern. If the child is putting in their best efforts, you should see it there. If they’re not, you’ll see it there as well.
    My big confusion about allowance is what should it be used for? If one is to go by Gail’s suggestion of $/year of age/week, is it just spending money? Or should it include some extra school stuff, like their weekly pizza fee, etc? I do not see my 10 year old as needing $10/week just for spending. I buy her clothes, pay for her extra-curricular and the needs that go with that, plus special outings, etc. She receives $5/month, but I may increase it to $10. My 15 year old gets $20/month, and again, I pay for her needs (uniform and basic clothing needs like undergarments, shoes, jackets), plus her extra-curricular, plus an extra $5/week for food at the cafeteria if she wishes. She gets a lot of hand-me-downs, so she has to buy all the “extra” clothing she wants, because, she can’t wear it most days anyway, being in uniforms. I feel that $20/month is sufficient. I will pay her extra if she babysits her little sister, but only because I’d have to pay a babysitter anyway if she wasn’t around. She’s getting a job as well on weekends, not a lot of hours, but it will be extra money for her. I haven’t decided whether it’s reasonable to expect her to put money away for post-secondary education or not. It will depend on how much she receives. I’ll probably make sure she puts at least half away into a bank acccount, and have her annually, take a percentage of what she has saved to put into an RESP. Thoughts?

  12. Our kids get a small allowance for chores around the house, dog/dishes/room/etc. In addition the older one works part time and the younger one is actively looking for a part time job – and in the interim does odd jobs for anyone he can find to drop him a $20, babysitting, lawns, etc.

    All their income gets a 1/3, 1/3, 1/3 split – 1/3 discretionary, 1/3 long term educational savings, 1/3 short term savings for things like trips, Christmas, etc. It’s tough to bite my tongue sometimes when their 1/3 gets blown on a $50 video game, but I relinquished control of that when we set up this system. Gift money is 100% discretionary.

    They are then expected to pay for 1/3 of university when the time comes, thus the 1/3 savings for that. We pay for their stuff like school supplies etc. right now.

    It’s not perfect, but it’s a system.

  13. Growing up, allowance was for chores. If I wanted money I did chores. Unfortunatly my parents did not instill a process to save versus spend. I just spent it all almost as soon as I got it.

    Money was never tied to school. If we did well we woudl get some kind of reward. BUt it was never like we expected it. One year we got these huge cookies that said “way to go ****” and another year we got a super nintendo ! It wasn’t based on what we achieved so much as what my parents felt we deserved at that time in our lives.

    I want my kids to understand responsibility and that if you dont do the chores then you dont get your allowance. I can only hope when I do have children that I am strong enough to do that :)

  14. My parents came up with the paying for grades thing with my older brother. By the time I was in the same grade they stopped that system. I felt so ripped off. He got hundreds of dollars and I got nothin’. That was definately not motivating!

  15. Allowances made a very brief appearance when we were younger, I don’t remember the rules around it – but we certainly never received money for a good report card.

  16. avatar Flynnycat Says:
    August 29, 2011 at 2:29 pm

    At one point when we were kids, our allowance was tied to chores. Then my older brother got a job afterschool in jr. high, which was very enterprising of him, but because he no longer required allowance money, he also felt he didn’t have to do chores. Whether paid or not, if you live in the home and are part of the family, you should do something. It’s not like at 15 years old he was paying rent! All his chores fell to me, and I didn’t get “paid” more for it!
    Also, my mom and step-father made me “responsible” for the dog. Please, parents who mentioned this, do NOT do this! A dog is a serious commitment and a member of the family. The dog or cat is YOUR responsibility, not a child’s. A dog is not a CHORE. I came to resent having to care for a dog who it was not my choice to have brought into our family. I loved him very much, but he should NOT have been my sole responsibility, and at the ripe old age of 8, I was too young for him to be solely in my care. It is not fair to the dog and not fair to the child. The dog or cat is YOUR responsibility, not your kid’s. And don’t think you’re going to “teach” your child responsibility by getting him/her a pet. They should have to prove they are responsible before you ever put the care of a living being in their often incapable and usually very fickle hands. Just my two cents on kids and pets and “responsibility”.

  17. I don’t think kids should be just given money out of the blue as an allowance. This doesn’t happen in adult life. As a gift on birthdays getting money would be fine.

    As adults, you work and earn your money. I see nothing wrong with a few chores to get money. No work = no money, so no chores = no money AND chores not done properly = no money or do chores over again.

    But how many chores is enough for a kid? I think I only had a few chores to do – sweeping the hallway and kitchen floors and clean the downstairs bathroom, so it wasn’t slave labour. Also, as a kid I got to spend the money on whatever I wanted. I had a bank account and I always had a little money to deposit. So with my money I was given freedom and also given choice.

    I like the idea of limiting the amount of money in an allowance, but not based on age – just on what the parents deem suitable. The younger kid would always feel like age = priveledge, which is not fair because they will always get less.

    Growing up, allowance was never tied to grades and we didn’t celebrate good grades.

  18. thanks for all the ideas re: allowance. the issue began when she HAD a babysitting job and refused to go leaving the parent stranded without childcare. At that point we figured “we are not handing you money each week so you can lay around” responsible people have to work for their money….

    so when school starts she will have no discretionary cash.. while all friends are at timmies next door she will have nothing to spend.

    this is why i need a plan for her to earn money…

  19. @ Heather – when my sister and I were teens, we had to earn our allowances, but it excluded keeping our rooms clean (that was a given). Extra work included vacuuming, dusting, cleaning bathrooms, mopping floors, etc. We would shovel the driveway for Mom before she came home from work; she thought we were being sweet and helpful daughters, but we actually enjoyed it because it usually meant a snowball fight 😉

  20. This is a timely post. Our 5 year old daughter started school today (she is so happy!), and we have decided to start giving her an allowance. By the end of the month, she’ll receive 2,50$ every week, with 3 little jars: mad money, giving and saving. We’ll open an account for her at the bank and make regular deposits. We also plan to set up a small billboard of what are each family member’s responsability, including the parents. We hope it goes well and we can’t wait for the part 2 on this subject.

    When I was a kid, and actually up until high school, my sister and I always received books at the end of a school year. I loved it. I think it instilled in us the love of books and education.

  21. Annick – you and I are in the same boat! We give our 5 year old daughter 2.50 instead of 5 (I think that’s too much for a 5 year old) which she divides into the jars as Gail indicated.
    HOWEVER – CAS – I’m with you! I don’t totally understand where she is supposed to spend or when. She hasn’t spent any of her money yet and like you, I purchase her clothing, etc. since she’s only 5. My other difficulty is that her brother is 3 and doesn’t receive an allowance so if I treat him, I don’t feel right telling her she has to pay for her own.

    GAIL: further clarification on this would be great!

  22. Heather: I agree with your suggestion in cutting off the allowance, given her age and past behavior. Your daughter is at the age where she will be trying to determine which future is ahead of her and instilling to her now that for every action there is a reaction, is the best way to go.
    If she doesnt fully understand that she needs to pull her own weight in life and not count on the handouts of other people, you and your wallet will constantly be bailing her out for the rest of her life.
    Better to nip this in the bud and get her on the right track.

    I liked the other suggestion for post secondary education, that the child is responsible for 1/3 of the education costs. That should (hopefully) give one motivation to save. And trust me, it only takes one crappy, low paying job to encourage anyone to consider additional education to getting a better job!

  23. We actually haven’t handed out allowances in years. (almost 17 & 14 yr old kids). Our kids have summer jobs, and work part-time at other school holidays, and save 80 % of all earnings, for further education. We pay all sport expenses and contribute to Resps as well. Our oldest will be graduating in 2012 (time flies!!) and has also saved for a school trip. Because of that we also pay for her insurance right now as any extra she has is for university. We feel our kids have worked hard even at this age for their good grades and their $ and i actually feel good about helping them now and in the future while we can. We are not big shoppers, but when we go they have their budget & lists of what they need, and want. It’s actually lots of fun.
    Sorry to ramble, this is what works for us.
    @ Heather- sometimes it takes working at min.wage or so for kids to realize how far a dollar has to stretch, and to maybe appreciate their parents’ efforts too. I feel that 15 is old enough to work as long as school doesn’t suffer. my 2 cents !!

  24. I really liked the allowance system my parents had for my sister and me. Each month we were required to show a balanced cheque book showing where all our money had gone. If it didn’t balance, you didn’t get an allowance that month.

    It was a great way of teaching us to watch where we spent our money. And they were good at not making comments about what we spent it on.

    My mom was also very good at talking to me about purchases I wanted to make and making sure I considered all sides. More often then not, she’d convince me that it wasn’t actually something I wanted to spend money on. Of course, now that I’m older, I still find it a bit difficult to loose up. But at least I’m not in debt just because I couldn’t deny my wants (only to find out that I didn’t really want it anyway).

  25. To reward children who get good grades doesn’t aid in developing character and to promise money to children who have no hope of achieving an A, or even a B, is cruel. On one hand you get the child who brags to classmates about all the money that’s coming for the A grades or about the new bike that’s been promised, and on the other you have the upset child who tried so hard but only got got Cs.

  26. I’m on the other side of the fence when it comes to reports cards. When I was a kid I got money for getting good grades. It was a great motivator for me. The higher the grade, the more money. And, who says it doesn’t help in developing character? My mother was a financial whiz and it was part of the way she helped my siblings and I learn to value money. Plus, the good grades I got made me feel good about myself.

  27. how many chores is enough for a kid? I think I only had a few chores to do – sweeping the hallway and kitchen floors and clean the downstairs bathroom, so it wasn’t slave labour. Also, as a kid I got to spend the money on whatever I wanted. I had a bank account and I always had a little money to deposit. So with my money I was given freedom and also given choice.
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  28. Mo D and Ember : thank you! and Mo D. we are on a farm and the driveway is about 1/2 km long.. shovelling that will be the last item on her “wages” list…..

    we have a farm but no animals.. so there is rock picking, grass cutting, and she can be in “charge” of the two pugs… their grooming, feeding, etc.

    it is difficult for her to work off the farm as i work out of town every day and limits her ability to get a ride to and from the nearest towns. … i really cant support her working for other people if she’s gonna lay in bed and refuse to go…

    hoping that hard farm work and low wages for us will entice her to show up where she is supposed to be…. i will also implement the moonjar program… so 1/3 of her wages go to spending, one third to sharing and one third to saving… it will be a condition of her wages….

    wish me luck ! anyone else feel like raising boys is easier than girls???? lol

  29. avatar Anonymous Says:
    August 30, 2011 at 7:11 pm

    I expect my kids to do chores because they are a part of the family and learning HOW to do chores is a life skill they will use for the rest of their lives. They get an allowance to learn about money management, another life skill. Eventually, when they are older, we will “marry” the two by offering more adult chores for cash, such as a commitment to mowing the lawn once a week all summer, or shovelling the snow regularly each winter, perhaps planting and tending to a vegetable garden for a season, or committing to preparing supper for the family every Tuesday evening… these are “jobs”, not chores, and they would get paid for them. As for their “allowance”, we provide them with most of the money we would otherwise spend on them – and we guide them on planning and anticipating their upcoming needs, making wise purchases, etc… while also providing them with a reasonable amount of mad money ($10/wk) so they can save up for something special, money to save for the future ($3/wk) and money to give to charity ($2/wk). We’ve been doing this for almost 2 years now with our two older children (9 and 11) and it has worked out well. They are both learning good money management skills.

  30. […] on  3 Allowance Mistakes To Avoid tackles this head on.To read the full post (and you should!) click here According to Gail, here are the three most common mistakes we can make. I am guilty of all […]

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