The answer to the problem of how to expose children to money doesn't have one right answer. (There are wrong answers, though, such as “Give the child as much money as she wants.”) One of the points of debate is whether to tie the allowance to chores or not. Tying the allowance to routine chores reinforces earning money for work accomplished, but can also breed a culture of “no pay, no work.” Not tying the allowance to successful completion of chores avoids this problem, but might encourage laziness in its place: “I'll get my allowance anyway.”
We're experimenting with a bit of both with our daughter — who's almost six already — and seeing what kind of effect it has on her dealings with money and work.
We bought a small lot of Polly Pockets on eBay and divided them up into $5 bags of dolls and clothing. We did this because it was cheaper than going out to the store to buy them new. (We'll teach her about shopping on eBay later.) She earns enough with her base allowance to get one of these every three or four weeks. She looks forward to getting her allowance, and checks each week to see if she can “buy” one of the bags.
She's mildly disappointed when she can't buy what she wants. (Aren't we all, though?) This is by design.
A couple of weekends ago, after we gave her the allowance and she found out that she didn't have enough for a bag again, we gave her an option. We desperately needed to clean up after our dogs in our back yard. This was not a job I wanted to do, as evidenced by the fact that it hadn't been done for quite a while. So I posed this to my daughter:
“I'll give you a choice. I'll pay you $1.00 if you clean up the dog poop in the back yard. This will give you enough for a Polly Pocket bag and you can play with it today. Or you can just wait for your allowance next week, and you'll be able to play with it next week. It's your choice.”
She chose to take the job. Through some trial and error we figured out how to make it easy for her to do the job. (We gave up on the poop rake and opted for a plastic bag rubber-banded over her hand.)
We were impressed with how well she stuck with it. She worked hard, and did a very thorough job with minimal supervision. I ended up helping her with the last bit because I didn't realize starting out just how long I had put off cleaning up the back yard (oops!) That, and I paid her $2.00 because it took over an hour of solid work for her to do what she did.
All in all, I was pleased with how this turned out:
- I didn't have to clean up the back yard. This doesn't need elaboration.
- It was my daughter's choice to do the work. I gave her the option not to do the work, but she chose to do it.
- She would have learned a lesson either way. Work or no work she would have seen consequences.
- She hasn't started to act mercenary. She doesn't give us a quote every time we ask her to do something. There's still a sense of contribution to the family that isn't lost.
- I get to try more things! I'll admit it: I love the idea of exposing her to entrepreneurship as soon as possible, and this is one step closer to her first lemonade stand.
I'm sure there are things I'm missing in all of my excitement. Please point them out in the comments.
My ‘system’ was much like yours. My DDs got an allowance. As the years went on, this went up as did their responsibility to pay certain life expenses (scout dues, school lunches, church contributions……clothing, auto gas….). By the time they left for college they knew how/what in life to budget and both graduated without ANY cc debt.
They were required to do certain routine chores at home just because they were part of the family & ALL have to contribute to household well being (set table, wash dishes, do laundry, dusting, vacuuming, take out traxh/recycle).
They were also ‘given’ the oportunity to earn extra by doing extra chores we disliked (cleaning floors, bath tile….). At 16 they both got PT jobs to earn more than the company of mom & dad paid but the routine household chores were still required & they got their (minimal)allowance thru college.
There’s something not quite right about giving your kids the crap jobs even you don’t want to do and then paying them less than minimum. Yes, provonding for your child is expensive but that was your choice. There will be plenty of opportunity for them to be exploited by employers later in life. I don’t think you need to start so early. You can teach the same values of work equals pay without kids picking up dog poop.
My husband and I have been talking about this exact thing recently so thank you for the post. I am torn between wanting to teach my kids that certain duties around the home are just part of being a family and helping each other out and allowance is separate from that vs. teaching them they have to earn their money.
Holly: Some of my high school friends had similar arrangements as your children. I didn’t have quite as many responsibilities for paying for things and I can see the benefit it would have had now.
Sun: What do you suggest as an alternative?
Alaina: Glad you liked it!
Maybe you can pay her to do some work you enjoy which frees you up to pick up after your dog. Its the part about passing the buck to your child that bothers me. You can still teach a lesson about chores, but there seems to be a selfish aspect to the “lesson”.
I feel exactly the opposite of Sun. I think it is great to teach the child that she can make money by doing the things others don’t want to do. We’ve got a guy here in Mpls that started a poop clean up business and is doing pretty well. http://www.scoopypoo.net/
Also you don’t need to pay kids minimum wage. I’ve had a babysitter for the last eight years. She started as more of a mothers helper for me when she was 12 and would just come over and play with the baby. I paid her $2 an hour then but she just entertained the baby while I was home to supervise. Now my kid is 8 and she is 20. We pay her $8/ hour but she provides full fledged nanny services and she negotiated another $2/hr if she has to drive my kid anywhere.
We give our daughter $3/week and it is not tied to chores. She has a list of chores she is responsible for just because she is a member of our household. She is expected to pay her Sunday School offering out of her money. She will occasional do extra tasks that we pay her for. She also helps out without asking for additional money. For example she helped her dad shovel yesterday. She save her money to buy all the Target trinkets that she used to beg for. She has learned to wait for things to go on sale and also will google for coupons. I think this is working well for ll of us.
I like your approach. Personally, I don’t think offering a “crap” job is a problem – especially since it was optional. Offering a variety of jobs is a good idea too though. I don’t see a problem with the chosen wage either – do what fits for your family, your values, your child’s age, etc. I think the key thing is to explicitly and consistently teach good financial habits in a way that’s aligned with your values. Bravo.
> especially since it was optional.
This was my earlier point of an adult exploiting the situation for selfish reasons. A child at age 5 or 6 can not fully make informed choices. If your child does things because it is part of family activities or responsibilities, that’s fine. Once you introduce the concept of money and pay, the meaning of the work changes. That’s my take on it, but of course, anyone is free to disagree. 🙂
Sun, I can se your points, but I’ve found that pretty much every job has some element of “crappy” chores to it – even executive positions! So, not a bad lesson to learn early. But, I do like the idea of offering variety in the options to balance things out.
I think minimum wage is wayyy to much to pay a youngster ($8 in California now). I don’t believe that minimum wage laws in the US were designed with this case in mind. Your own kids get a lot of on-the-job perks too – like your unconditional love, food, shelter, etc 24×7 😉
All that said, do what makes the most sense for your family, your values, and the message you want to deliver. There’s no “one right answer”. Take the time to explain your point of view to your child too – probably lead to a valuable conversation for both.
An aside…I think you owe her a bit more for that task! (Don’t start in on negotiated fees and bonuses with a “nearly” six year old…)