Giving Children An Allowance
“For whom the Lord loveth He correcteth; even as a
father the son in whom he delighteth”
(Proverbs
There is no such thing in God’s economy as an allowance. The word allowance
is a misnomer, because it means something that is given to someone and was not
earned. Although it is important that children receive money of their own—either
through allowances or payment for jobs completed, so that they can begin to
learn how to handle money wisely—parents need to be careful that they do not
train their children to expect allowances, rather than to work for what they
need. Rather than giving their children an allowance to which they do not have
to be accountable, parents really need to teach their children financial
responsibility with any money they receive.
Establishing an allowance
Setting up a successful allowance means talking with
your children about what the allowance will cover, how they can spend it,
consequences of overspending, how much should be saved, and how much should be
given to the Lord’s work. A weekly income helps children learn money management,
responsibility, values, goal setting, and planning. They also experience the
consequences of making financial mistakes. Parents, in turn, are freed from the
chore of being their children’s bank tellers and they’ll find it easier to track
how much money their children spend.3
In order to ensure balance, parents need to be careful about setting allowance
amounts. Children’s allowances should be enough to look forward
to, enough to enable parents to begin teaching them
God’s financial principles but not enough that all their wants and desires are
met and they have no need for extra jobs. Ultimately parents need to wean their
children off allowances and onto their own earned income. Therefore parents need
to make sure that children’s allowance raises do not keep pace, percentage wise,
with their budgets. Their allowance should become an ever-decreasing portion of
their budget.4
Allowance guidelines
1.
Allowance amounts depend on several factors: age, maturity level,
interests, responsibilities, and the family’s financial situation. Give enough
to encourage giving to the Lord and saving,5
but don’t give too much.
2.
At the beginning of each school year, sit down with children to
discuss the allowance. Decide what things the allowance will cover.
3.
Let children make decisions and mistakes with their allowance.
Monitor spending and don’t give them more money when they overspend.
4.
Put the allowance agreement and guidelines in writing, including
the amount, what day it was given, what it covers, and any restrictions.
5.
To keep up with children’s changing needs and current costs,
review and adjust the allowance agreement regularly.
6.
Be consistent: set a specific time and day to give the allowance
and stick to it.
7.
Don’t link allowance to routine household chores. Children have
chores because they’re members of the family; they get an allowance to learn how
to handle money. Linking the two may result in children who won’t do anything
without pay or children who decide the money isn’t worth the work.
8.
Don’t link allowances to behavior; it confuses the issue and can
become a source of conflict and manipulation. Don’t use an allowance to punish.
9.
Don’t use allowance as a bribe for good behavior. It’s okay to
reward children for courage or especially good behavior, if the reward is given
after the fact.
10.
Be a good role model. Parents should teach their children that God
owns everything by allowing them to see this principle at work in their lives,
that the first portion of their allowance belongs to God, that they need to live
on a budget, and that they need to exercise self-control and discipline in their
spending.6
Extra money
All children need some basic responsibilities for
which they are not paid. Children make their beds because they sleep in them.
Children help with dishes because they eat food and dirty the dishes. Children
put dirty clothes in the laundry because they wear them, dirty them and need
them clean again. As children get older, if they complete tasks over and above
their regular chores—gardening, washing the car, cleaning the basement—it’s fine
to pay extra for the extra work. If children say that they really need
something, provide opportunities for them to earn the money, do not just give it
to them.7 However, the parent must be fair and pay the children
equitably, according to what the parents are able to afford. But before they get
paid the parent should make sure that the children have done quality work, they
have finished the jobs, and the parent knows and has approved how the money will
be spent.
Conclusion
Each parent and child takes on certain responsibilities and also gains certain
benefits from being a family member, much like the relationship of each believer
in God’s family. We each have certain responsibilities that must be carried out
if the family is to work together, children included. Each family member
receives benefits that come from working together and benefits from simply being
a member of the family (such as an allowance). By teaching that each family
works and lives together for mutual growth and benefit, and putting allowances
in that light, parents and children alike can establish the right attitudes and
principles. The key is to give children their allowances and require them to do
their household chores without tying the two together like a work-for-hire
agreement. We have responsibilities toward God in working for His good, but we
also receive many blessings simply for being His children. We must use God as
the best example of parenthood to our children because He balances gifts and
rewards.
© Crown
Financial Ministries, 2002
1 Larry Burkett, “Finances for Children
and Teenagers,” Christian Financial Concepts, 1994, p. 3
2 www.northwestfcu.org/nwfcu/teaching_money.htm
3 www.familymoney.com/articles/allowances-3.htm
4 Larry Burkett and Rick Osborne,
Financial Parenting,
ChariotVictor, 1996, p. 107
5 www.familymoney.com/articles/allowances-3.htm
6 www.northwestfcu.org/nwfu/teaching_money.htm
7 http://family.go.com/Categories/Parenting/Features
/family_0307…/dony127faallowance.htm