Allowing Allowances

I have a love-hate relationship with the concept of allowance. I love the idea of letting my kids manage their own funds: it gives them a realistic sense of the value of money and what things cost, and it teaches them how to save for things that are important. And I really love the idea of them helping out with housework. But I consistently ran into two problems that made me hate allowances:


Problem Number One:


I have issues with an allowance being the result of chores because, as members of our household, they should just pitch in and help out – especially when it comes to their own messes. No one pays me for all the housework I do. Heck, they rarely say thank you.


I also believe working for money puts you in a negative mind-set about working. Not feeling like I work for a paycheck helps me enjoy what I do. If my kids learn early on that work is only a means to money, they may run into job-satisfaction (or life-satisfaction) problems later.


After many various experiments with writing out to-do lists (fail), “Super fun chore charts!” (bigger fail), and trying self-directed chores (epic fail), we eventually reached a compromise where chores were done regardless, but allowance wasn’t tied to the chores directly.


With that solved, we ran into …


Problem Number Two:


I NEVER have cash. I hate going to the bank. I use my debit card almost exclusively. Unfortunately, my kids don’t have a credit card slider. Therefore, I was constantly saying, “I’ll owe you allowance” whenever they earned it. Or they’d ask me to buy them things and “take it out of my allowance.”


However, we were not so great at keeping track of what was owed. At one point, my middle daughter either owed me $23 or I owed her $408. Allowance quickly became a vague concept and held absolutely no weight: “I’m not going to clean my room, what are you going to do about it? Not give me the allowance that you never give me anyway?!”


The Solution:


A few months ago, we were at a birthday party at Chuck E. Cheese and I was watching the kids gleefully exchange tokens for tickets and then tickets for toys. They are, as I’m sure you know, cheap, tawdry toys, but it didn’t stop the kids from showing off each and every little plastic ring as a major award that they earned and deserved. This is when it dawned on me: Actual money doesn’t matter. What matters is the instant gratification of picking what they spend it on.


So I developed a system to replace allowance. Here’s how it works:


  • Chores are required because they are members of our household, whether they get an allowance or not.
  • “Allowance” is based on a combination of that week’s behavior, general attitude towards us and each other, and how much nagging we have to do in order to get said chores completed.

And we give them Monopoly money.


To prepare them for being able to be free and easy with their “cash,” I sat down with them and went over the “Sense and Cents-Ability” quiz included below. The questions in this quiz helped us discuss how money really works and gave the kids some insight into different ways to approach spending vs. saving, sale vs. full price, and the possibility of winning the lottery. It was a fun family activity that I recommend everyone try with their kids.


Then I went out and stocked up on DVDs, books, games, etc., which are kept at MomS-mart (Shop Smart. Shop MomS-mart!). Items are around the same cost as I paid as I want the kids to have realistic expectations of what things cost. They can save for “big ticket items” or blow their stack on smaller things each week. They’re learning valuable lessons about spending a dollar on a candy that disappears immediately versus saving for a game that can played over and over. My hope is this will someday translate to making smart long-term investments. And most importantly, I still don’t have to go to the bank.


For more articles about financial literacy and other topics that help kids grow into curious, confident, and creative kids, be sure to subscribe to your favorite Cricket Media magazine.


Sense and Cents-Ability
by Kathiann Kowalski
Odyssey Magazine
February 2010

Cents Article


Cricket Media Mama is very glad her kids like the new allowance program because she’s pretty sure she actually owed her middle daughter $408.