Rachel Biale, MSW, is a Berkeley-based parenting consultant who has been working with parents of very young children for more than 25 years. Send questions through her Facebook page: Parenting Counseling by Rachel Biale or via email@example.com.
My first-grader has informed me that our family is woefully behind the times in the financial arena. “Everybody has an allowance!” he said. “ I’m the only one in class who is poor!” I wasn’t sure what to say, so I told him we’d think about it. I called some class parents and got the full bell curve from “No way!” to “He’s had an allowance since he was 4.” What do you think in general? What’s a reasonable amount? Should there be strings attached such as doing his chores, cooperating at home or finishing his homework and getting good grades? — Dad in Dublin
Dear Dad: This is one of these questions that has a different answer for each family. It depends on how you relate to money, your financial situation and your attitude toward consumption. While we’ve all acknowledged that “money makes the world go round,” we need not let it run our family life. If it’s important to you to have a family atmosphere that does not view money as all-important, you might want to “go against the grain” here. You could say: “In our family, we use money to buy what we need. Instead of an allowance, let’s talk about the things you need and the things you want, and together we’ll make good decisions about what to buy.”
Another view is that handling money is an important life skill and parents ought to teach their kids how to manage it early on. An allowance provides an opportunity to instill key concepts: earning your rewards, saving, wisely planning how to use your assets and giving to charity. If this is your inclination, consider these suggestions:
Do some field research so the amount of your weekly allowance is comfortably in the midrange among your son’s friends. Or use this rule of thumb: a dollar for each year of age (8 years old = $8/week), with only half spent each week and the rest put aside for savings and tzedakah (more on that below).
A weekly allowance is perfect for elementary school kids. Middle-school kids can “graduate” to a monthly allowance with the greater freedom and responsibility of planning for larger sums.
Have a “financial planning meeting” with your son in which you go over what kinds of things he’ll spend his allowance on and devise plans for savings and tzedakah. For the latter two, I recommend a matching program: For every dollar your son puts in a tzedakah box, you put one in as well. For kids younger than 9, you’ll want a transparent box or jar so they can see the coins and bills pile up. For the “savings plan” you might match at 50 cents to the dollar.
The savings can be split into two parts: one set aside toward a purchase in the short term (2-3 weeks for ages 6 or 7; an additional week for every year of age thereafter) and longer term (3 months and beyond). When your child is around 10, you can open an actual savings account at the bank.
The allowance should be contingent on your child’s satisfying basic family obligations each week, from cooperating in getting ready for school and cleaning up toys to doing household chores.
You can let your child earn extra money for doing jobs around the house or for neighbors. But be sure to balance earning money for work with teaching your child (primarily through modeling) about acts of kindness done voluntarily, for no material gain.
Some parents wonder about paying their children for good grades. I do not favor this as a general rule, although I recognize that it may be appropriate for high-risk kids in environments with minimal support for excelling academically. In general, schoolwork should be seen as a fundamental obligation and success its own reward (more on school and motivation in a future column).
And finally, watch how you and your spouse talk about money: Are you manifesting your values, or are you sucked in by our culture’s infatuation with wealth?