In a really great article by Susan Flynn on Parenthood.com, the issue of allowance -- among other child finances topics such as the Tooth Fairy and birthday party costs -- was discussed. Frankly, I was surprised by some of the amounts being tossed around by some parents. The article noted that "According to a Nickelodeon/Yankelovich Youth Monitor Survey, the average allowance is $4.80 per week for 6- to 8-year-olds; $7 per week for 9- to 11-year-olds; and $16.60 per week for 12- to 17-year-olds."
Maybe I'm just old fashioned, but if the parents are paying for all the child's expenses, I don't see the need for a huge allowance at age five or six unless the parents just have nothing else to do with their money or this money is actually going into a college fund. But this is an issue that is up to the particular family and what they feel is right and proper for their situation, so that's all I'll say about it. I won't let what other people do affect what we feel is right for our particular situation.
Not Setting an Overextending Precedent
We started our five-year-old son's allowance at just .25 cents for doing a list of three chores around the house, including clearing the table for dinner, helping take out the trash, and taking his dishes after dinner. It might not seem like a lot of money in this day and age, but we're fine with it. You want to know why we're fine with it? Because he's fine with it; and it's a good starting point.
We want our son to appreciate his allowance, and he does. Starting him out at $5 a week, when he would be happy with .25 isn't going to do us much good. It's not going to help him appreciate the value of a dollar as much and giving ourselves some leeway in amounts allows us to give him something to shoot for and work toward in the way of increasing his allowance down the road.
Why we Don't Pay More
But besides the appreciation aspect, some people might be wondering why we don't pay more for our son's allowance. Well, first off, we as his parents pay for everything he needs at this point in his life, so he really doesn't have much of a use for the money other than saving it…which I admit is a good use. But besides this, it's the setting of a precedent. If we start at $5 a week, but hit financial trouble and can't sustain this amount, I don't want our son going backwards in his allowance amount. But also, I don't want to build a sense of entitlement in him.
I personally feel that by starting with a very low amount, our son will learn to appreciate smaller amounts of money as well as learn how to make due with these smaller amount and make them last. If he can get by with less, then he will certainly be able to get by with more. And building a sense of entitlement -- that he's due big paydays -- in my opinion is setting him up for future disappointment if something should happen to those big paydays. Sure, we want our son to eventually make good money, but we also want him to understand how to live below him means and survive should those hefty paychecks go away.
We look at an allowance as more of a learning tool, and if we can make it even more of a learning tool by giving less at the moment, then so much the better.
Where we Make up for this Dearth
Just because we don't give a huge allowance to our son though, doesn't mean that we don't make up for this in other ways. We tend to look for financial gifts for both of our children throughout the rest of the year. Whether its silver coins at Christmas, bonuses for doing extra work, helping open a savings account, or whatever, an allowance is just one item in our arsenal of financial teaching weapons. And we would rather take some of the money that we might give as an allowance and use it to teach other financial lessons rather than just throwing it at him in one singular form.
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More From This Contributor:
Flynn, Susan. Parenthood.com. "What Parents Pay for Sitters, Birthday Parties and the Tooth Fairy" http://www.parenthood.com/articletopics/whats_the_going_rate.html/page/1. December 15, 2012.