Kids & Allowance — It’s Never Too Early To Start!

Hi, I’m Dana Obleman. Welcome to this week’s video chat. Today, I wanted to talk to you about something that I feel really passionate about, and that is the idea of allowance for children. I think we just need to look around at the state of our country, everyone’s debt load, to realize that some important things need to change.

Credit cards have tricked us into believing that we can have whatever we want, whenever we want it. The reality of that is that it’s not true. We can’t always have exactly what we want. That is why I think it’s so important that we start teaching that to our children from a very, very young age. I would say from three years and onward, you can start an allowance system.

Now, absolutely, it’s going to be a little trickier with a three year old. They’re not going to fully understand that they only have $3, and you’re not going to be able to buy the $100 teddy bear. But it’s about starting a foundation. It’s about giving children the skills and the tools that they need to start making some wise decisions about money.

I really feel that money needs to be respected. You need to think things through. You need to plan out what you’re going to buy and when.

If you start that young, it just will grow with your child. In fact, I look at my 10 year old, who just managed to save enough money to buy himself a computer. I think he’s got a lot more money skills than a lot of teenagers I see these days.
So go ahead and start it. Encourage it, and follow through with it.

Now, some of the pitfalls that people have fall into with allowance. I’ve been there myself. I believe that allowance should be earned. I’m not about to hand my children money for nothing. Because again, where in the real world does that occur?

I want them to earn it. That means they need to do daily chores around our house in order to receive their allowance.

A lot of people say to me it’s just this week of arguing and nagging and pouting about the chores that have to be done. I agree that that’s not fun. That’s not the way I want things to be in my house.

So, here are some strategies I’ve collected along the way to make the whole allowance issue a little easier for everyone in the family. The first step is to make sure you’re really clear about what the chores are. Just saying, “Well, keep your room tidy…” Especially for a four year old, your version of “tidy room” might be much different than hers.

You need to be very specific about what the chores are. If we’ve got a three or four year old, it could simply be that the chore is every day, you take your dish to the kitchen when you’re done your meal. That could be the chore. That might be enough for a four year old to handle.

I suggest you write it out. It should be on a chart somewhere. Mine’s on the fridge. Even for little ones who can’t read yet, it is just so important that they have at least a visual. So, you say, “I’m not sure you’ve done your chore today. Let’s look at the fridge. Here are your three chores. Have you done them all? Just make this a little easier for everyone.”

At my house, we’ve got a list on the fridge, and I don’t nag about it. The rule is, if you don’t do your jobs, you lose money. If you didn’t put your laundry away, I’m taking a dollar off your allowance. For every item that’s missed, a dollar comes off. That means that there are some weeks that they’re down a few dollars, absolutely, because they’re kids. They’re learning and they don’t always get it right.

But by doing that, we eliminate a lot of the arguing. “You didn’t make your bed today? Oh, well. You lose a dollar.” I find that that just works so much better keeping everybody on task and doing their chores without a lot of fight. I would encourage you to get started on that with your kids right away. Again, I can’t stress the importance of learning good money skills.

One thing to think about too is with the younger ones, the whole issue of saving money is tricky for a younger child. They have an instant gratification system going there. As soon as they get their $4 in their hand, they want to hightail it to the toy store and spend it all.

That’s OK. I really believe we shouldn’t put our own value on what they buy. My son spent $100 he saved up one time on a rock. [laughs] Took almost everything I had to bite my tongue and say, “OK, it’s your money. If you want to buy that rock, that is up to you. But your money will be gone and you’ll have to start saving again.” He happily bought his rock and loved it and showed it to everyone and is still really proud of that.

So, be careful you don’t get your own issues involved in their spending. But again, it’s the foundation, so if you teach that child from a very young age that, if you want something that’s 10 dollars, you need to save. Eventually, they’ll come around and they’ll start to understand that. What I can buy for $20 is way better than what I can buy for 5, and they’ll start to save.

That’s my advice on allowance. I’m really excited to talk to you about that today. I thank you for watching. Sleep well.

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