Several people have recently asked me to chime in on allowances. OK, maybe not so recently – it has taken me months to write this post. Thank you for your patience!
I have to admit I was surprised by the intensity of feelings out there on this subject. There are legitimate concerns about encouraging entitlement on one hand (“If you don’t pay your kids for chores, they’ll develop an entitlement mentality”) and greed on the other (“If you pay kids for chores, they’ll develop a greed mentality”).
Wherever you fall on the continuum, it seems everyone is agreed that allowances will teach kids something about money and work. Nobody wants their kids to grow up feeling entitled. No one wants to have the greediest kids on the block.
I wish I could say, “Do this, don’t do that.” or… “In Genesis 58, the Bible says, “allowances….” There is no Genesis 58. There are no verses about allowance.
Since there is no explicit instruction about allowances in the Bible, I want to be sure you hear me say this:
We have not found a one-size-fits-all answer to this question. We’ve only found the one-size-fits-Quillens answer.
And it’s not a simple answer, either, because it is not a simple question. There is not even a single question about allowances, there are many.
Do you tie allowance to chores? Is it earned income? Is it free money? Will paying my kids for chores teach them good work ethic or entitlement? Will giving my kids allowance teach them generosity or entitlement? Can I withhold allowance for poor performance? Should I give advances on allowance?
When do you start giving an allowance? What do kids do with their allowance? Can/Should I dictate what my kids do with their money? What about tithing? Saving? Giving money to others? Spending?
How much allowance should we pay? How often should we pay it?
What other ways can kids earn money? Do we give them money for other things they’d like to buy? Do we give them money to go out with their friends? For gas? For food? For spending money at camp?
I’ve barely scratched the surface.
Perhaps the best place to start is by deciding what you do want your kids to learn. Maybe we need to focus on what character traits we want to develop rather than concerning ourselves with what we want to avoid.
We found it helpful to address money and work as independent concerns. By looking at the two topics separately we could decide what we want our kids to understand about each and come up with a comprehensive strategy for “allowance” which accomplishes our goals.
We decided we want our kids to learn to manage money according to Biblical principles. We also want them to actively help their community thrive and to work wholeheartedly at whatever they do as if they serving the Lord.
Today let’s talk about the managing money part. Next week we can talk about community involvement and gainful employment.
In the Quillen house, basic principles we want our kids to understand about money (in no particular order) include:
- All money comes from the hand of God – through the work you are able to do as a result of his grace to you or through the gifts of people he moves to offer assistance.
- Money is not the end of blessing, it is a means to bless.
- We show we trust God’s provision by giving back a portion of what he has given to the local church, knowing he will provide for our needs through what remains.
- We may need to sacrifice our comfort and convenience for the sake of others, but it is also legitimate to use what he has given to meet our own needs.
- We need to plan for generosity as much as we plan for our future.
- Money doesn’t grow on trees. It is not unlimited. We must make choices about how we will use what we have.
- We don’t get to spend what other people have.
- Err on the side of generosity.
What you decide is important for your kids to learn may look a lot different. That’s OK.
Some practical realities to consider:
- To manage money, you have to have money.
- If you are going to live within your means, you have to know what your means are.
- Establishing a periodic, specific allowance provides a context for setting a budget. It allows them to plan for generosity, unexpected expenses, and future plans.
- Allowance tied to chores and performance may result in an erratic pay schedule, which makes it difficult to learn how to live within a limited income. Yes, there are life lessons tied to keeping a job through excellent performance and living within income in commission based work, etc. We address this as we teach them about work and responsibility to the community.
In practice, in our house it looks like this:
- We give our children an allowance, it is not tied to chores.
- We pay them every other week on Monday.
- We start giving an allowance on their ninth birthday. We also give them a bank account on their ninth birthday. There is nothing magical about nine – it’s just when we do it.
- We have limited resources, so their allowance is not large – $10 every two weeks.
- We direct deposit $7 into their accounts as “long term savings.”
- They receive $3 in cash. We expect them to give at least 10% to the local church. The rest is “pocket money” for buying gum, toys, gifts, contributing to others… whatever.
- We require them to plan their purchases – I don’t shop without a list, they don’t either.
- If they don’t have money with them, they cannot buy something. (e.g. I don’t loan them money until they get home or until the next allowance…) None of the stores are that far away, they can always ask me to take them to the store again or put it on the list for the next time we are going.
- Handing over cash or seeing your bank balance drop after a purchase is a great visual teacher. We make sure they see their account balance before and after a purchase, if they are purchasing something electronically.
- We help them to set a budget.
- We encourage them to have a plan for their long term savings. Somewhere (and it depends upon their preference whether it’s on paper or the computer) they need to keep track of their thinking with respect to that money. If they have $100 in savings, I want them to have documented $20 is college savings, $30 is for a car, $40 is for gifts, $10 is for compassion towards others, etc. As their balance changes, so should the balances in their categories.
- We don’t tell them what their categories must be – I know one child has a Lego fund, another likes to save to fill a shoe box for Operation Christmas Child, and another just likes to set aside money in case a need arises. Of course they can shift money around, but they need to see they are buying gum with their Lego money, and the Lego fund will, by default, have less.
- We encourage them to give generously to others – whether it is contributing to gift purchases or supporting a missionary.
- We encourage generosity with time and possessions as well as with their money. We model this, too. If a parent gets updated technology, we often “gift” the old version to someone else in the house. If our needs are well supplied, we give it outside of the house. We maintain a “give away” pile by the door – items that are in good repair that we no longer use go into it. When it is full, we donate it appropriately. We rarely sell our unneeded or used items.
These are some of the things we do to communicate money management to our kids. It may look a lot different for you – but if you are looking for a place to start, maybe our system will help.
Next Wednesday, Lord willing, I’ll post on the “wholehearted work” part of our kids-and-money equation.