My Stand Against Allowance


I have never given my children an allowance. Primarily my own laziness prevented me from starting another bookkeeping challenge. I also felt that with six of us in the house, each member of the family needed to realize early on that he or she needed to contribute to the household in one form or another. The question then becomes how do you teach your children the value of money? Or for that matter, how will they learn to handle money if you don't give them any?

Easy - I have been talking to my children about money since they were infants. When we would go to a toy store or the supermarket I would tell them the amount I was willing to spend and they needed to find something they liked that matched the price. In fact, if the item's price was lower than what I had set, they could get an additional item that together would add up to my price.

Math 101 - check! No tantrums - check!

However, when the items were more expensive than the limit I set, that was when the job of parenting began. Saying no and sticking to it was hard; giving in and buying the item would have been the easy but lazy way out and counterproductive over time. Since I always set their expectations ahead of time, they were not surprised when they heard the word "no" and simply went off to figure out another option.

I'll give you an example of how this attitude paid off years later. One of my daughter wanted a pair of winter boots that cost $120. I don't spend that much on boots for myself so I was certainly not going to get them for her. After seeing them I could not believe such an ugly pair of boots could cost so much. I told her that I would not be buying them as the price was too high. And since I was responsible to buy winter boots for each of my children, spending so much on one was not fair to the others. If she wanted them she would have to buy them herself. You see, whenever my kids received gifts of cash they could keep the money and spend as they wished. Since this only happens on birthdays and certain holidays, they have always carefully saved their money. I did offer to give her the $30 I was planning on spending on some no name boots for her that she could put towards her savings. The rest of the money she needed to figure out how she could earn herself.

That winter she did not get the boots however the subject did not go away. In fact, the following fall she had an idea. She offered to run her sister's upcoming birthday party instead of my having the party at a place away from our home and paying a small fortune for an hour and a half event. She offered to run the party in our basement with her friend and all I would need to do is supply the food and the material for an arts and crafts project. She would organize everything. The party was a hit and she made some serious money as a result. After thinking of several more fantastic ideas, she had enough money saved to buy a two pairs of boots.

That winter my mom took her shopping and she purchased one pair of boots with her own money plus the $30 I promised her. She never wore them in the rain and when she returned home she would clean them and carefully put them away. She protected and cherished them because she valued them. In contrast, a colleague shared with me how her daughter ruined her new pair of boots and was demanding a new pair. Her response was: what could she do?

Here's the lesson: there is nothing wrong in setting limits and saying no. By sticking to my guns and placing a value on what I felt boots should cost, my daughter needed to work and use her imagination as to how to earn the extra money for something she felt was worth the effort. By using her imagination she came up with a business idea, formed the business plan, presented it to me and sold it to her sister. The planning she did in collaboration with her sister and friend required some serious team work. Finally, executing the plan successfully was real work which she performed exceptionally well. The actual outcome of earning the money and then being able to spend it on an item she valued greatly was the lesson that gave her satisfaction and a great sense of accomplishment.

I sincerely believe that parenting is the hardest job we are all blessed to perform. Teaching our children the value of money requires work and imagination on our part. Making the process a little complicated and not as simple as saying "yes" to everything they want I believe helps them achieve so much more. Don't be afraid to set limits and expectations for your children that force them to stretch and reach higher. They will only grow stronger, wiser and more creative.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individuals. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.


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