What I Love (and Hate) About Giving My Kids Allowance

Dollars & Sense on 09.29.11
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Photo:Britt Reints

A few months ago, my husband and I began consistently giving our two children an allowance. We made room for it in our household budget every month and let the kids know that they would now have their own money to spend on whatever they wanted. That's turned out to be good news and bad news for our entire family.

The Good News

When I'm being asked for the hundredth time to buy a plastic toy that will be lost or broken within a day, I no longer have to explain the pitfalls of wasting my money. I simply remind them that they have their own money to spend on things like that. It is so nice to give up a little bit of the mean lady role, although my kids certainly campaign for having me buy them stuff from time to time.

Now that they're using their own money, both kids have become more aware of the financial cost of things. They understand that money is exchanged for goods and services and that some things costs more than others. They're also learning about making financial choices and setting priorities. Do you want that hat more than you want to get your face painted? If you can't afford both, you'll have to make a decision about which is most important to you.

The Bad News

Unfortunately, being face with the consequences of our decisions often sucks. When we have to make tough decisions as adults, we moan to our friends a little. When kids are put in similar situations, they like to cry to their parents. Loudly. Despite what my kids think, it's not fun to be the one to teach them about limitations. I do, actually, want them to have everything their heart desires, but I also want them to learn to live in a world where that's not always possible. That's a decidedly unfun lesson to teach people you love.

The other problem we've run into is watching our children waste their money on purchases we would never approve. Do I say something when my 11-year old son wants to buy a pizza to eat by himself after we've already had dinner? Do I let my daughter spend her entire savings on an ice cream sundae before lunch? What about the purchases I know they'll regret, like the baseball jersey of a team that will be forgotten two days after we've left the stadium? If we've said the money is there for whatever they want, does that mean letting them fund habits we wouldn't normally support?

One thing we've learned is that the rules are not the same for every child, much like each adult follows different guidelines when managing their own finances. My husband has to approve every purchase my daughter makes and my son isn't allowed to use his money to circumvent rules we may have made. Beyond that, we're learning to bite our tongues as we watch our children navigate the tricky waters of money management.

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