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Christian Living

Finance

Allow an Allowance

Budget_kid

We can give our kids a great gift in their journey toward adulthood by teaching them the value of a dollar while they’re in our home. Children who grow up as young adults who can manage money will have stronger marriages and less stress in their families. One of the most effective ways to do this is through an allowance.

The subject of an allowance is a highly subjective one. Some parents are against the idea of paying a child any money at all. Others believe it’s a child’s right to get paid for being a member of the family—with no responsibility required. Deuteronomy 6:4 encourages us to take our children’s training seriously as it encourages us to “teach them diligently . . . and talk of them when you sit in your house and when you walk by the way and when you lie down and when you rise up.”

Here are some suggestions to help decide what works best for your family based on your financial situation, training emphasis, and your child’s individual needs.

Benefits of an Allowance

  • Money Matters – The most obvious benefit of an allowance is that it gives the child an opportunity to learn to manage money.
  • Safe Haven – When kids learn to manage their money while they’re under a parent’s care, they have the freedom to fail in a relatively safe haven. When they fail, the parents are there to train them.
  • Self Worth – A child learns to feel good about the fact that he has money of his own to manage. He’ll feel even better when he learns to give freely, save diligently, and spend wisely.
  • Consistency – It’s important to give a child his allowance on the same day of the week or month. This gives the child something to count on and allows him to budget his needs (and wants) accordingly.
  • Budget – An allowance should be budgeted into your family’s finances, and your children need to know this. It sends a message to them about the importance of a budget, thereby priming the pump for the day you will help them develop budgets of their own.
  • Theirs to Manage – The money they receive is theirs and the parent helps them learn to spend it wisely, according to biblical principles of good stewardship. If a parent refuses to let them learn to manage their money, then the teaching opportunity is lost. Dr. Kevin Leman said in Making Children Mind Without Losing Yours, “To give that child an allowance and then turn around and tell him how to spend it is to go right back to the problem of authoritarianism. . .The authoritarian makes all decisions for his child—including how the child should spend his allowance. The child learns nothing about handling money or accountability” (p.77, 2000, Fleming Revell).
  • Responsibility and Accountability – These are the main benefits of an allowance as kids learn both of these invaluable life skills. Children are responsible for their chores and their money. They are accountable to you as to how they manage both.
  • Not Paid for Chores – There’s a delicate balance between paying your child for chores and withholding a portion of the allowance for chores left undone. Daryl Lucas said in his book 105 Questions Children Ask About Money Matters,“Try not to tie allowances to chores. Doing so gives children the impression that they should be paid for all work, even cleaning up after themselves. Give them both chores and an allowance because they are part of the family” (Question #79, 1997, Tyndale House Publishers).

Age Appropriate

An allowance based on a child’s age is a good place to start. So, unless you have twins, all your children will get different allowances. Their chores or responsibilities would need to be age appropriate, too.

  • Younger Children – Even a 3-year-old child can help set a table, carry dishes to the sink, or pick up his toys and clothes. As a 4-year-old, he can begin to learn to make his bed with help, and by the time he’s 5, he is doing a fairly decent job of it. Children will learn to work long before they learn to manage an allowance.
  • An Age to Start – A good age to start giving an allowance is around 7 years old, depending upon the maturity of the child and your family’s finances.
  • The Amount – A good rule of thumb is fifty cents per year. An 8-year-old would get $4. This could be paid every week or every other week, depending upon your family’s budget.

In conclusion, kids get an allowance because they’re a responsible part of the family, but it doesn’t mean that there are no conditions placed on that allowance. Children have a responsibility to do their chores (even though they’re not getting paid to do chores, as we’ve already stated.) For example, when our oldest son, Daniel, was in the habit of leaving his bed unmade, we decided to pay his sister (from his allowance) to make his bed. He had the double agony of losing money and seeing it go to his sister. He never left his bed unmade again.

Ideas for Kid’s Budgets

Budgets for kids can be fun! Here are some great ideas you can use to teach your child to budget. In all these cases, your child can keep the money he doesn’t spend—which also encourages stewardship and frugality.

  • Restaurants – When you go out to eat, set a predetermined (and fair) amount for your child to spend on his meal. He may choose to drink water or eat dessert at home in order to come in under budget.
  • Fun Days – The next time your family goes to the movies, the zoo, or a theme park, set a budget for your child. When the money runs out—it’s gone. Your child will learn how quickly money can be spent if he is not careful. You will need to guide younger children in this exercise and coach your older child while letting reality be the best teacher.
  • School Supplies – Set a budget per semester to include backpacks, lunch boxes, and all supplies. It's amazing how a child will lose fewer pencils and keep up with a notebook better when he has to pay out of his own budget for these items. Once again, at the end of the semester, he gets to keep what he doesn't spend.
  • Clothes – By the time your child is a teenager, you might think about putting him on a clothing allowance or budget. The challenge is to coach him in his choices without nagging. By the time the money is running out and he is running around in holey socks—you'll need to be prepared to stick to your guns without shooting yourself in the foot!
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