2014-THANKSgiving

The $100 Allowance

97 Comments

100-dollars

One day, my 13 year old daughter had an idea. “You give me $100 and I’ll pay for everything for the whole school year.” She had gotten this idea from her cousin who is, shall we say, more of a money saver.

“What exactly does ‘everything’ include?” I asked.

My husband said, “Write a proposal.”

She quickly took pen to paper, visions of a $100 dollar bill dancing in her head.

I was resistant for one reason: I didn’t want to part with a lump sum of $100. But it didn’t take more than a minute to realize her idea was definitely going to work in my economic favor.

Thirteen-year-olds crave independence; mine certainly does. She doesn’t like me buttoning up her coat, brushing her hair, or telling her to clean her room. She wants to decide when she goes to bed, what she wears to school, what she packs for lunch – and beware if you suggest a haircut.

The path ahead points to high school, college, budgeting, and motherhood. One hundred dollars? I hoped this might be a positive segue to independence.

Her $100 written proposal stretched far and wide: All clothing, shoes, movies, food, sporting events, and birthday presents for friends. I hesitated. There was no way $100 would cover all expenses.  But she insisted she’d be fine and handed me a pen. I signed on the dotted line.

September purchases:
• $20 worth of school supplies including a splurge of multi-
colored ball-point pens
• A $5 shirt from American Eagle
• Two lip glosses for $7
• A pair of wedge shoes from Old Navy for $30

I’d like to say I kept my mouth shut regarding the wedge shoes, but when I gasped, “30 dollars!” she was irritated, reminding me that she was spending her money and I was raining on her parade. So, I apologized and promised to be quiet. Within thirty minutes, after looking back and forth between her shoes and her wallet, buyer’s remorse set in and the shoes were returned.

I continued to remind myself: Keep mouth shut. This was my daughter’s experience, her lesson to learn.

September was the honeymoon stage, spent with a happy leisure. My daughter felt rich and free to spend her large amount of cash. She bought a few candy bars, a pair of jeans marked down, and offered generous rewards to siblings for fetching items from upstairs.

October 1st: A stylish, shiny blue, soft and furry coat for $40.

And thus, the dream ended.

October 2nd: Broke.

October 5th: “I think we should reevaluate my budget,” she said, eyebrows knit in worry. I smiled sweetly as words were unnecessary. The dotted line was signed; there was no wiggle room. That’s when she got busy. When I was dropping her younger siblings off somewhere, she’d call out, “Can you ask if I can babysit?”

When she did a chore around the house, she asked, “Can I get paid for that?”

She distributed a flyer around the neighborhood advertising her services. With Christmas looming, a weekend dance, and new shoes needed for Spring track, she was adding and subtracting in her head. She started to plan ahead.

She picked up dropped change. She practiced the piano more faithfully as she gets money from Grandma for every book passed off. She stopped turning down less-ideal babysitting jobs.

Who else has this been a good lesson for? Me. I like shopping for my kids, finding sales, picking up shirts here and there. But after the allowance was given, I had to put shirts back, knowing I’d ruin the money lesson if I swooped in to save the day. I did buy her a Chapstick one day. “Thank you, Mommy!” she squealed, throwing her arms around me.

The tale didn’t end there, but in one month I saw a girl manage her money better. We didn’t have any scenes with her begging me to buy her a single item of clothing – she was on her own because she wanted to be. Unexpectedly, but wonderful, there was far more gratitude for the things her parents bought her.

Another unexpected consequence? Her three younger siblings want a $100 allowance as well. Rather than grimace, I smile. I’m going to have a lot more spending money.

Here’s a recommended plan:
• Make expectations clear: Who will pay for what (it can work well to have kids pay for all “extra” or “fun” things with their own money)
• Help your child make a list of wants and needs and discuss what goes on each list
• Help your child create a personal budget and write the plan down on paper
• Sign the agreement
• Keep a simple notebook ledger (or an spreadsheet on the computer): Money in, money spent
• Don’t buy stuff for them or bail them out!

My daughter has yet to take me up on my offer of payment for weeding the garden or shoveling out the chicken coop (that day may never come), but I’m keeping my mouth shut. I know that when she needs the money badly enough, she’ll ask me for a job.

My mother used to say she gave us chores to build our self-esteem, a connection I refused to make at age 14. But I know what she means now. There is a look of empowerment on my daughter’s face when she has worked hard to earn something she really wants. It’s equivalent to happiness.

Read part 2 of this post here.

Comments

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  1. 1

    Agora says

    Love this article, I have always thought this is a much better way of handling kids and money than giving them an allowance. GenX has already become known for being helicopter-y, do-everything-for-them-y over-the-top parents who breed entitled children that don’t appreciate everything or know how to do for themselves. And I know this because I see it all the time. Gratitude is an important life skill, so is money management and work ethic. From the time my kids were old enough to walk and talk (they’re 7 & 9 now) there has been no allowance in our house. Rather, we have a schedule of chores that I pay them for- IF they are done correctly and on time. There has been a lot of whining since none of their friends see the sense in it/want to bother enforcing it, but I see them maturing faster than their classmates and developing a sense of personal responsibility that will serve them for life. And did I mention how much easier it makes things for me?!

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  2. 5

    says

    I absolutely would. My wife and her sister got what I would have considered a generous allowance, but they also had to buy a lot of their own stuff (my wife tells of saving for three months to buy a rug and matching lamp for her bedroom at eight years old). But the end result is that my wife is way better about budgeting than I am, and with my ADD, the extra practice would have been very helpful. We plan to give our son a similar budget from a young age. He’s only three now, but learning to manage money is a priceless gift to give him.

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  3. 7

    says

    This kinda reminds me of the plan I have my kids (ages 7 and 9) on and the direction they are headed. They are on the Dave Ramsey Financial Peace Jr plan. They have two kinds of chores in our house, the first is the kind you do because you are part of our family and the second is the kind you get paid commission on. If they don’t work, they don’t get paid. Simple as that. And when they get older (into the teen years) we will open them a checking account and everything that we would normally spend on them each month (things like clothing, lunches, etc) will go in the checking account, along with any money they earn from other jobs. The money will be up to them to spend, we won’t bail them out or give them extra if they don’t budget for the month. A really good book that details all of this is Smart Money, Smart Kids. Too many kids these days aren’t being taught how to handle money and more kids need a parent who will tell them no and let them figure out how money works while they are still safe at home.

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  4. 9

    says

    First I thought heck I never got an allowance from my parents. They said it was my job to help around the house cuz they pay for everything so there was no arguing with that. If my daughter asked for a year allowance I’d let her to teach her money budgeting but I never thought I’d give allowance cuz old school worked for me so it’ll work for her right???! Let’s hope lol

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  5. 12

    says

    Excellent. My mom did NOT do this for me – she wielded her money “power” over me, which didn’t teach me very much about money or the value of it. I still struggle with budgeting as a grown up…. sigh…

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    • 13

      Melsioga says

      Me, too! We never got paid for anything- EVER. I learned that I *will* allow my children to earn money, and actively involve them in household budgeting.

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  6. 14

    says

    Yes. Absolutely. Right now my son gets $12 a week plus any bottle returns. If I have to remind him to do a chore or he has a missing school assignment, he has to pay ME back (goes into the “Trip Jar” AKA…Rainy Day Fund). I buy NEEDS…he has to save for wants…it is working out great. He is learning that buying a pack of gum every time he goes to the store “Just Because ” he has the money adds up!

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  7. 15

    says

    We did something similar for my sons 8th birthday last year — we gave him a $100 spending budget and let him go through Target. It really made him really THINK about he actually wanted, instead of the pipe-dream where he get’s EVERYTHING! It made him think about how much all this stuff he wants actually costs and realized why we can’t get him everything (he’s the oldest of 4). It put gift giving into perspective and now his requests are reasonable and he’s happy! He’s also more willing to use his allowance to get his younger siblings something, as he understands our budget only stretches so far =)

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  8. 16

    says

    I like this idea, as it teaches so much. When my husband turned 18 his parents charged him rent to live at home. I don’t remember how much, but it was reasonable. What he didn’t know was that they were saving all the money he paid them. When he moved out, they presented him with all the cash to help him get started on his own. It was a neat way to set expectations about paying regular bills while helping him (albeit unknowingly) save. We plan to do this with our own kids.

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  9. 17

    Susan says

    Great idea! I did something similar with my son when he started high school (8th grade and up was allowed to go off-campus for lunch). I gave him $80 on the first of each month and it was his to do with as he pleased. It should have covered $4/day for lunch, but if he wanted to buy a loaf of bread, peanut butter and jelly and bring a sandwich every day, that was fine too. If he wanted to treat all his friends to lunch and then be broke all month, that was fine too. I just wasn’t giving him any more $. We never had a problem where he was asking us for extra money – he figured it out quickly. And I didn’t have to worry about having lunch money for him every day.

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  10. 23

    says

    My husbands parents made him pay rent when he got out of college and then gave it all back when he moved out and got married! He had no idea that they were saving this money! Good lesson on the real world. I had to learn things the hard way and make my mistakes, now time to teach my kids hard money lessons in life!

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  11. 24

    says

    Great idea!! Parents also check out Dave Ramsey’s financial peace junior, we have started it with our almost 4 year old…it is a lifesaver!! He is earning money through chores and realizing “money doesn’t grow on trees!” Lol

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