Parents go around and around on the topic of kids and money. Should you give it to them for chores done around the house? Or, are chores simply a part of family life? It’s debatable. It’s only when your child starts hearing about how much money a friend at school has that she starts to wonder where her’s is. It’s up to you to decide, and you need to be clear about it.
Kids and Money: Allowance Vs. Money Earned
In the book, Put Yourself in Their Shoes, parenting expert and author Barbara Meltz says that grade school is a good time for a child to start learning about money by getting an allowance. But before you arbitrarily set a price, talk with your child about your expectations of what she should do with her earned money. Arrive together at what a good amount is. (If part of the teaching experience is to be about saving, the allowance needs to be enough so that your child can put some aside.)
Meltz suggests starting at $3 a week for a 7-year-old, and giving an allowance twice a month rather than weekly.
“No allowance here,” says local mom Lisa R Brown. “Regular chores must be done first (no money for these). Then he can pick from extra chores to earn money; he also has to pay for anything extra he wants,” Brown adds.
Local personal finance expert, Dave Ramsey, says a commission may work better than an allowance — to pay by the job. For instance, if your child helps with laundry, pay her .50 cents. You can post a list of jobs your child needs to complete throughout the week with the amount stipulated for the job. By the end of the week, add up how much she earns based on jobs completed. Ramsey says this approach helps kids get on board with new things that need doing quicker than you may realize!
“We give our kids an allowance and then if they don’t fulfill their stated (and printed out) responsibilities, they can lose money,” says local mom Alissa Beuerlein. “From studies we’ve seen, this works well and has worked well. It’s a pretty good motivator. We also don’t buy them toys or things they want unless it’s Christmas or birthday, so they save up for things they want with their allowance. This gives them some sense of responsibility with money,” Beuerlein adds. Local mom Tammy Worley Holloman says she too has a good system in place. “Our 12-year-old earns $12 a week ($1 for each year),” says Holloman. “That’s for chores such as taking out the trash, doing dishes and doing his laundry.”
Handing Over the Cash
The decision is made. Now, it’s time to decide how to hand that money over.
Some parents use a prepaid credit card. Other parents suggest you put the money into a checking account for her. But maybe, at the end of the day, a big piggy bank is all your child needs.