Take out the papers and the trash!Or you won’t get no spending cash… Remember that old ditty from the Fab Fifties? Half a century later, it’s the ‘‘home rule’’ in many households. ‘‘As they get older, I’m drawing a clearer link between chores and allowance,’’ says Beryl H., mother of nine-year-old Ari and seven-year-old Molly. ‘‘They need to make their beds, put their clothes in the laundry, and take their dishes off the table.They get allowance for participating in the family. We’re not just doling out money.‘‘Beryl and husband David pay extra for additional jobs done, like shoveling snow. Ari has his own savings account, and his parents match what he saves, which has proven to be a big incentive. Molly ‘‘wants every piece of plastic jewelry she sees,‘’notes her mom, so to curb impulse buys, she’s required to wait a few days to see if she still really wants a particular item.It all seems to work pretty well, but like everything else in family life these days, questions surrounding allowance have become more complicated. We asked Jayne Pearl, author of Kids & Money: Giving Them the Savvy to Succeed Financially, to answer parents’ questions.Questions and Answers Q. My kids don’t get an allowance. Should they?A. Absolutely. Today a lot of kids are ‘‘on the dole.’’ Parents reach into their pockets, or choose not to, when kids ask forsomething. The problem with that is there’s no real accountability. For one thing, parents don’t have a clue what kids are spending, and they’re missing a great opportunity.Q. How much should kids get?A. I like to put as much control in kids’ hands as possible. Have them pay for school lunches, church offerings, and birthday presents. Keep track of what you spend on their needs and desires over a couple of weeks, and then come up with a reasonable figure to base theirallowance on. Tell kids, ‘‘You’re in charge and you have to make this money last.’’ By age seven or eight, they’re ready to start withsavings incentives, learning tradeoffs, and delayed gratification.Q. Should parents require kids to save a portion of their allowance?A. I believe incentives work better than rules when it comes to savings. Otherwise they’re saving because you tell them to,not because they want to or understand the value of it. Kids, like adults, need to be motivated to save.One thing you can do is tell children that for every dollar they put into their savings account, you’ll match it, with thisstipulation: They can’t take out the money you put in. It’s only for long-term savings.Q. My kids are always asking me to loan them money for something they see in a store, with a promise they’ll pay me back whenwe get home. Is this okay?A. Kids have to learn to be prepared. I don’t like giving advances on the spot because then it’s not coming out of the child’spocket directly. When you give a child this sort of advance, they’re buying now, paying later. It’s the whole credit trap, somethingwe need to teach them to avoid. It also sets up a situation where the parent is the middleman, depriving the child of the chance to interact with the seller using his own funds. Many of us find it hard to later collect money from our kids. This is especiallynot good to do if a child is disorganized or forgetful. Q. Is it a good idea to link allowance and chores, the way I, as an adult, connect my paycheck with the work I do at theoffice?A. I don’t like it because it sets up power struggles. What happens when the child is feeling too lazy to feed the cat or take out the trash and says, ‘‘OK, don’t pay me the allowance this week?’’ On the other hand, some parents swear by thissystem. If you do it, you have to be consistent, require your child to be the same, and make sure he understands the monetaryvalue of the particular chore what it’s really worth. I would point out that nobody pays you to clean the toilet or buy groceries! I think chores should be linked to being a citizen, rather than an employee of the household.Q. What about charitable giving?A. This is an afterthought in many households. A friend of mine has a system I like. He puts all the solicitations he receivesin the mail in a folder for six months. Then he sits down with his kids and they make a family decision on where and how much togive.I think it’s important to have some sort of system, perhaps a weekly collection box that all members of the family contribute to. It’s important for parents to sit down and have a conversation with kids and decide together, ‘‘This is what we should be doing to help others.’’ But definitely, kids should contribute their own money.Q. My daughter is a clotheshorse. Should I make her buy clothes from allowance? How young is too young to do this?A. I think it’s a great idea, a real learning opportunity. First, agree on a budget. Then, if she beats the budget, she gets to keep the difference. Instead of battling over what to buy, now you’re on the same side, focusing on the same goal of saving money. It all seems to work pretty well, but like everything else in family life these days, questions surrounding allowance have become more complicated. We asked Jayne Pearl, author of Kids & Money: Giving Them the Savvy to Succeed Financially, to answer parents’ questions. Questions and Answers Q. My kids don’t get an allowance. Should they?A. Absolutely. Today a lot of kids are ‘‘on the dole.’’ Parents reach into their pockets, or choose not to, when kids ask forsomething. The problem with that is there’s no real accountability. For one thing, parents don’t have a clue what kids are spending, and they’re missing a great opportunity. Q. How much should kids get?A. I like to put as much control in kids’ hands as possible. Have them pay for school lunches, church offerings, and birthday presents. Keep track of what you spend on their needs and desires over a couple of weeks, and then come up with a reasonable figure to base theirallowance on. Tell kids, ‘‘You’re in charge and you have to make this money last.’’ By age seven or eight, they’re ready to start withsavings incentives, learning tradeoffs, and delayed gratification.
Q. Should parents require kids to save a portion of their allowance?A. I believe incentives work better than rules when it comes to savings. Otherwise they’re saving because you tell them to,not because they want to or understand the value of it. Kids, like adults, need to be motivated to save. One thing you can do is tell children that for every dollar they put into their savings account, you’ll match it, with thisstipulation: They can’t take out the money you put in. It’s only for long-term savings. Q. My kids are always asking me to loan them money for something they see in a store, with a promise they’ll pay me back whenwe get home. Is this okay?A. Kids have to learn to be prepared. I don’t like giving advances on the spot because then it’s not coming out of the child’spocket directly. When you give a child this sort of advance, they’re buying now, paying later. It’s the whole credit trap, somethingwe need to teach them to avoid. It also sets up a situation where the parent is the middleman, depriving the child of the chance to interact with the seller using his own funds. Many of us find it hard to later collect money from our kids. This is especiallynot good to do if a child is disorganized or forgetful. Q. Is it a good idea to link allowance and chores, the way I, as an adult, connect my paycheck with the work I do at theoffice?A. I don’t like it because it sets up power struggles. What happens when the child is feeling too lazy to feed the cat or take out the trash and says, ‘‘OK, don’t pay me the allowance this week?’’ On the other hand, some parents swear by thissystem. If you do it, you have to be consistent, require your child to be the same, and make sure he understands the monetaryvalue of the particular chore what it’s really worth. I would point out that nobody pays you to clean the toilet or buy groceries! I think chores should be linked to being a citizen, rather than an employee of the household. Q. What about charitable giving?A. This is an afterthought in many households. A friend of mine has a system I like. He puts all the solicitations he receivesin the mail in a folder for six months. Then he sits down with his kids and they make a family decision on where and how much togive. I think it’s important to have some sort of system, perhaps a weekly collection box that all members of the family contribute to. It’s important for parents to sit down and have a conversation with kids and decide together, ‘‘This is what we should be doing to help others.’’ But definitely, kids should contribute their own money. Q. My daughter is a clotheshorse. Should I make her buy clothes from allowance? How young is too young to do this?A. I think it’s a great idea, a real learning opportunity. First, agree on a budget. Then, if she beats the budget, she gets to keep the difference. Instead of battling over what to buy, now you’re on the same side, focusing on the same goal of saving money.
