I recently heard from Laurel, a writer who had interviewed me
for a story about allowances and then contacted me as a parent with
a perplexing personal problem. "When I gave my 5-year-old a quarter
for putting away his little brother's laundry (a task that is above
and beyond my expectations of what he needs to do), he then started
to look for endless ways to make money.
"I appreciate his motivation, but it gets annoying. I feel like
he becomes super money-centric and loses track of a purer
motivation -- doing things just to be helpful. Any ideas for giving
an allowance that addresses this issue?"
I'm intrigued by Laurel's question for a number of reasons.
First, it stands the usual allowance issue on its head -- instead
of trying to motivate a kid with money, this parent is trying to
de-motivate her son. Her situation highlights one of the problems
of tying allowance to chores: Kids can turn into little money
grubbers who expect to get paid all the time. (As kids get older,
this can morph into a related issue: Parents who depend on cash to
motivate their kids have to keep raising the stakes and eventually
lose their leverage.)
Laurel also seems to have run into a snag because she was trying
to follow one of my allowance guidelines (see
The Last Word on Kids and Cash
). I recommend that parents not pay their kids for basic chores,
which they're expected to do just to be helpful, but allow them to
earn extra money by doing extra jobs.
It may be that Laurel's son is a little too young. A good time
to start paying for extra jobs is when kids are 6 or 7 and learning
about money in school, so they can make the connection between how
much they're getting and how far it will go.
Also, preschoolers tend to have short memories and attention
spans, so Laurel's problem may be self-correcting. If Laurel wants
to stick with the program, she could draw up a list of four or five
chores for which her son can earn an extra quarter and leave it at
that.
The principle is that kids should do basic chores, such as
cleaning their room or helping unload the groceries, because
they're asked to, not because they're paid. Plus, over the years
I've learned that many parents have a tough time keeping track of
whether their children have actually done their assigned jobs. A
survey by DoughMain, a financial-education and family-organization
Web site, found that 89% of parents say they assign chores to their
kids, but only 29% use some kind of formal system, such as a chore
chart or written list, to track them (
DoughMain
and
Tykoon
, another kids' finance site, have online chore trackers).
No handouts.
But here's the critical point: An allowance shouldn't be a handout.
Tie the basic allowance to "financial chores" -- spending
responsibilities that the kids take over from you. You could start
by having them pay for their own collectibles, for example, or
refreshments at the movies. The beauty of the system is that as
your kids get older, you can expand their allowance and their
responsibilities (see my upcoming column on clothing
allowances).
To make the connection between work and pay, give your children
the opportunity to earn money by doing extra jobs, such as taking
out the trash or the recycling, vacuuming the family room, raking
leaves, washing the car, or whatever you define as service above
and beyond. (To avoid being caught in a situation like Laurel's, be
specific about what you'll pay for.)
I think this two-tier system has three pluses: It's easy to keep
track of, it sets up a sensible -- and workable -- arrangement for
tying allowance to chores, and it's an effective way to teach kids
how to make decisions about managing their money.
Follow Janet's updates at
Twitter.com/JanetBodnar
.