Monday, June 8, 2009

An Allowance System that works

I thought I would follow-up my last post with one about the allowance system that we have implemented for our children. We held off for awhile on giving allowances because I couldn't come up with a system that I felt good about. I didn't want to just hand-out money to hand-out money, but I also didn't want a system where I paid a specific amount of money for a particular job around the house. I don't want my children to feel that I'm paying them to help around the house, but I didn't want the allowance to be given without any requirements. I finally hit on the idea we use.

I have a chart for each of my children with a list of household duties. Things like setting or clearing the table, emptying the dishwasher, putting their dirty clothes down the chute or putting away clean clothes, giving food and water to the pets or reading or practicing the piano. They get a sticker for each of the things that they do and when they have accumulated a specific number (right now our magic number is 14) they get their allowance. At first I gave them a week to accumulate the stickers and if they didn't get 14, they had to start over with a blank chart. I have since decided that they can just keep the chart up and turn it in for an allowance once it has 14 stickers on it. My oldest has asked if he can earn his allowance more than once in a week. For now, I tell him that he can, but he hasn't yet done enough work to do it. Oh, and when they try and negotiate a raise, the criteria is to earn their allowance within a week for three weeks in a row before we can discuss it.

The beauty of the allowance has been twofold. First is that I don't have to worry about them bugging me to buy them things if we go to the store. They are welcome to spend their money however they wish (that has taken some discipline to not interfere, but I'm doing better) and are expected to buy their own treats and toys from the store. I have to admit that I LOVE this part. It makes going to the store so much easier for me and it is also teaching them to pay attention to the prices of things. They are starting to be better shoppers.

The second benefit is that I get more help around the house Surprisingly to me, they aren't motivated enough by the money to help without being asked, but they are more willing. Maybe it was just the process of making of list of things they could do. Now I can ask them to do anything on the list and they will usually do it, eventually.

I think it's important for children to learn how to manage money before they are on their own. Maybe I'm a little biased because I have an MBA, but I really appreciate the money management skills I have acquired and am determined that my children will be savvy about earning, saving, and spending. I like this system because I do believe they are learning. We don't just give them money to squander, we cut back on what we spent when we gave the money. So far, our system seems to be working pretty well the way we want it to.

Eventually, we expect to expand the system to include regular long-term savings and charitable contributions. One step at a time. We have offered to match any money that they save over from previous weeks if they want to buy something more expensive. Our 10-year-old has taken advantage of that, but the younger girls haven't yet been that disciplined. I'm sure in time it will happen.

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