Allowances and Finances

Updated on July 12, 2011
P.M. asks from San Antonio, TX
15 answers

Recently I read different ways parents teach their children the value of money. Some give their children a weekly allowance, some give them a monthly allowance, some just give them money when needed. Since the idea behind it all is to teach children the value of money, I became curious as to how the parents of these children were taught by their parents and how are they are today at handling finances.

I was given money whenever I wanted to go do something, such as a movie or go to the mall. I was not given a weekly or monthly allowance. I didn't have to budget or save. Sad to say, I'm not very good with handling money today. I have a tendency to spend too much and then I'm left with more month than money. I am trying very hard to teach my child the value of money while he is young and that he needs to save.

How did your parents handle money with you growing up and how are you with finances today?

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answers from Dallas on

My parents were dirt poor. We didn't get money, unless we worked really hard around the house, or did something extraordinary. I was working by 14 (had babysat before then), and earned my money that way. I am very good with money. I manage it well, budget well, and am not impulsive. I feel a lot of that has to do with learning the value of earning money and saving it, growing up.

I do not plan on giving my son an allowance. If he does an extra chore or chores, helps in a unique way, does extra well on school work, has great behavior, etc...I will reward him. I will always give him opportunities to earn money!! But, no...I will not just hand it out.

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answers from Norfolk on

My Mom raised me and my sister on her own and she had to pinch every penny just to keep food on the table.
There were no allowances and everyone does chores to help out because we all work together to make the house nice because we all live there.
Money from your parents is not earning it - it's a hand out - and it teaches nothing about how hard it is to really earn it - from people who don't know you, don't want to and could not care less if you've been a good boy today.
And having money to spend without knowing how hard it is to earn just trains up little consumers to spend spend spend before they have any concept of debt and living beyond your means.
My husband got no allowance either while growing up.
Our son does his chores and gets no allowance.
But for good behavior and good grades his reward is I'll get him anything he wants at the book store.
He saves every penny or other coins he receives (Tooth Fairy money) / finds (his piggy bank is well fed) and he is not quick to spend it on anything.

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answers from Victoria on

my two older brothers and i were all given five dollars every friday for doing chores. which were dishes, laundary, taking out the trash. we drew names on who did what for the month at the beginning of the year. i always had about eighty dollars or more. i was the saver. some what the bank. my brothers would come to me and borrow money. i did not know about intreast then and wish my parents would have told me even if it were a penny a day it would have been a great way to teach about intreast. i am still a saver . my brothers both work very hard ( most of the time they have two jobs). no longer do they ask to borrow money from anyone but they are both still spenders and i am still a saver. i think its different for each person. i plan on having an allowence for my kids but teaching them to save a percent, give (charity) the 10% and spend the rest. or if they want to save up for something they can do that also instead of spending the rest. but i think teaching responsible spending is bennificial. we did also get money to see a movie or if we needed clothes that was not included in our allowence. not until we were sixteen and had our own job.

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answers from Austin on

My mom had this can system. We received an allowance and immediately split it up into 3 cans - one for tithing, one for saving, and one for spending. I fully intend to do this with my 3YO when she is older. I think it gives a great visual that this money belongs here, this money belongs there and ne'er the twain shall meet. :-) When I was a teenager, my mom gave us a clothing allotment. This was a great tool to teach good spending habits. My dad gave us credit cards but taught us that their purpose was solely to develop a credit rating. I have never carried a balance on a credit card.

I handle the finances in our family and keep a spreadsheet of categories that money is saved for (property taxes, vacation, etc.). In my head, these categories are cans whereas my husband tends to just look at the overall balance. I've had to teach him what's spendable and what's not. I have a lot to thank my parents for and this is a big one. Good for you to take this issue seriously. Best of luck.

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answers from Dallas on

I was raised by my mom and I started working at age 13. By the end of high school I was working 3 jobs, maintained my honor rolll status, managed an academic scholarship, paid for my college and my first car.

I've been there done that with finances because we didn't have it.

As a married couple, we are very much into delayed gratification and teach our daughter that as well. We believe in no debt.

We have a 16 yr old and she is now talking college and hearing some kids say their parents have no college money for them.. these are parents with a boat on the lake, 2nd home, etc.. In our opinion, misplaced priorities. Our daughter will go where ever she chooses and she will not graduate from college full of debt. We believe it is our obligation as parents to provide her with the best education possible to set her up for her future. I know I am a minority with that view.

We have our daughter fully funded for college, she understands the value of money. We run our own company and daughter is involved with the financials to understand what we do and how.

Daughter does babysit regularly and this past weekend got $15/hr cash. When she is going out and may need cash, we give it to her. Her dad is notorarious for sticking cash in the console of her car for her to find.

We believe in living below your means..... even with that, we live pretty darn nice.

We are both on top of finances, personal and with our business.

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answers from Dallas on

My parents were lower middle - middle class, very hard workers. From the time I was 15, they expected me to work to pay for anything "extra" other than food at home, basic clothes, soap, toothpaste, etc. Make up was my responsibility, same for fashionable clothes, marching band expense, car, gas, insurance, etc. They didn't assign chores/give allowance, it was just expected that once you hit working age you pay for your own stuff. I will say that it gave me and brother a great work ethic and helped our careers a lot. Bosses love us because we do it all. However, I think (if you can afford it) a lesser expectation is better. I am going to expect my kids to work and contribute to their expenses but maybe just part time and not their whole support. I like the allowance idea, plus extra for really hard chores/special projects, but I do believe that you should make them save a certain % and keep a certain % for charity. Good luck

PS forgot to answer the second part of your question. I am a saver, because I was always afraid of running out of money. I saw my mom run out of money a couple times and it scared me. I am going to try to make my DD responsible with money yet not fearful.

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answers from Houston on

My parents gave me an allowance if I did my chores that week. I learned how to be thrifty and how to save. When I returned from college I had to work and pay rent ($200 a month) plus all my expenses, toiletries, food ect. They didn't allow me to borrow their car and charged me to take me to the store and to work and dr apts. That zapped all my money and I didn't have enough to save and get my own place and my own car. So it kind of forced me into marrying sooner then I might have otherwise because it was the only way I'd be able to move out (I was 22.)

I did fine with money until credit cards. The reason is because with cash/check I knew exactly how much money I had. But when I married hubby gave all our cash away all the time, people we knew or people we didn't, if they looked pitiful enough he handed it over. He also didn't like me taking the check book with me. So I never had money and had to use credit cards. Then we hit a rough spot (death of a child, vehicle rollover, cancer diagnosis and treatment, several surgeries in a couple of years, ect) and had to use our credit cards more and more! Now we're in a bad financial place, even though I'm still very thrifty.

So my advice is that credit cards are good to establish credit, so have something that is a recurring charge, such as a cell phone bill, be paid on the credit card and then paid off right away. Everything else should be paid in cash, and you can teach this to your children from an early age by example and dialogue. By giving them an allowance and not buying things for them they didn't have money for will remind them that you don't buy things you can't afford.

Then, do what my parents did and allow them to work for the money they need for that special movie or toy or whatever. $1 here and there will add up!

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answers from San Antonio on

My parents made me get an after-school and weekend job when I was 16. I was required to save half of every paycheck for college. I had to pay my own gas to get to work (and anywhere else I wanted to go) and pay for all activities I did. It was a great experience. I am relatively careful with money now. Although saving half was a drag, the fact that I had over a thousand dollars in spending money when I got to college because of what I'd been doing for 2 years helped me learn a big lesson. I was able to hold off working in college for 2 years so I could get adjusted and study, yet still have fun because I had money I'd worked for.

I also had to learn a work ethic. When I was called and asked to sub for someone who couldn't work that day, I was required to say yes unless I already tickets to something or I had a test the next day. I was learning that saying no because I just didn't feel like working was throwing away money, and saying yes gave my work the idea that I was a valuable employee they could count on.

My husband did have a paper route when he was younger for awhile, but his parents did not let him have a regular after school job because band was important and they wanted him to study. When I met him, we had to work on his finances quite a bit. He still has a tendency to assume he has more money than he really does.

I think my parents did a great job. I learned how to balance a checkbook when I was young (although I do more online monitoring rather than balancing on paper these days--times are different). The more responsibility I had associated with my money lessons, the more I learned that I could apply later. I do give my 6-year-old a dollar every week or so, and that's a good start, but I think lessons need to be more intense than that for teens.

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answers from College Station on

In my mom's house, money was a taboo subject. You didn't ask, didn't bring it up, no matter what. She was terrible financially. Luckily, she was my roll model for what NOT to do. My Grandmother, was very financially savvy! I wish a were half as shrewd as she was.

In my Dad's house, money was scarce and was frequently talked about. Since I did most of my formative growing up in my Dad's house, that is where I learned to be frugal. We clipped coupons, collected and sent in rebates, shopped on sale or clearance, bought store brand goods, those kinds of things. We got a weekly allowance that was kept on paper. We never had cash in hand, but we know our balance in our allowance acct and could usually have money whenever we asked for it. We were not required to save or to give to charity, but that just came naturally.

I give my boys an allowance based on their chores. They do their chores, they get paid. We keep track on a spread sheet on the computer. Once you turn 12, you have to put 10% of your weekly allowance into savings. I haven't started charitable giving yet. Maybe at 15. They get to spend their money as they want, but need to have prior approval. They rarely have cash on hand. They have all saved up for big ticket items (iPods, DSs, expensive games) so they have learned the value of a dollar. Currently, my oldest is saving to build his own computer. It is slow going. There are so many things to distract him from that goal. This is a good lesson for him!

Just how we do it in our house.

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answers from Portland on

I think the way I have decided about it is I will have my daughter do chores (I will have some too) because we are a family and do them as a help to our home. If she does an extra, like fold my laundry (ha jk, I just hate folding laundry) or mow the yard or whatever extra I'll give her a little money. I will let her see me paying some of the bills and showing her how much things cost. If she wants something small like movies or a shirt or whatever I will tell her she has to pay for it. Something big I will tell her if she saves money and works to get money around the house she will be able to buy it. I'll encourage saving and paying bills and warn about getting over your head (my downfall) and warn about credit cards/store cards/ overpriced phone or car insurance policies (I have kicked myself in the butt b/c of an overprice car insurance policy). I may adjust this but it seems like an okay plan right now.

When she's old enough to work I will start cutting back on things a bit and have her pay for all of her leisurely activities (movies, laser tag, etc).

My parents never gave us an allowance. They just chose to buy or not buy what we wanted. I would mow the yard to use the nice car but nothing involving cash. They warned me about credit cards and to this day I won't get one. BUT they never warned about rip off insurances and overpriced phone plans so I fell into that trap at 18. With the giving of money and no allowance, I am good NOW at handling money but for years I would spend too much and not save anything. I still look back and wonder how was I living paycheck to paycheck with 3x more pay, no child, and single. Still baffles me.

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answers from Los Angeles on

My mother and father were 8 and 10 years old in 1930 when the great depression hit hard. They were old enough to know hunger and doing without because of the depression. My mother and father put in large gardens so they could eat. They just didn't have money to go to the store. Both had chickens. My mom's mom was a widow when my mom was about 1 year old and she never remarried. She took in boarders to make ends meet.

My mom and dad went through so much poverty, they became savers and investors. Welfare was when you took your neighbor produce from your garden because they were hungry.

My mom and dad gave my brother and I 10 cents per week for washing dishes. (To this day I hate washing dishes, but ir made me get an education so I wouldn't have to wash dishes for a living.) I cannot remember having any money to spend. My dad insisted my brother and I save 50% of what we earned. So for doing a week's worth of dishes I got to spend a nickle. In those days, finding a penny on the sidewalk was unusual.

My mom taught me a very valuable skill. She taught me how to bargain shop. I can remember going with her to a butcher shop where she would buy chicken backs for 2 and a half cents a pound. She would ask the butcher if he had any bones for the dog. He usually did. I can remember to this day, the butcher gave her a bare bone. She told him that our dog would starve on the amount of meat and fat left on the bone. He smiled and gave her a different bone with some fat and meat on it. She thanked him very much. We had the chicken backs for dinner. Mom took the bone and put it in a pot of water and boiled it until the meat and fat fell off the bone. She would cut up the meat and fat and add vegetables to that and we'd have soup.

I'm a saver too. My brother was brought up with me and he was a spender. He never saved a thing. He died in poverty.

I saved enough to pay off my home and both my cars so I was free and clear of debt. Until my kids started leaving home to get married I was within $50 per month of being elegible for some form of government assistance. I never even applied. That should tell you I was was frugal and how easy it is to qualify for welfare if I was able to buy and pay for a home on income that was elegible for welfare. My goal was to save 10% of my income. I couldn't do that when I got my first full time job. But when I got a raise, we saved that. When I got enough raises, I saved the 10%. Had my mom taught me how to invest wisely I would be very well off today. (My mom knew how to invest wisely. But when she was brought up, adults didn't share family finances with their children.)

I paid my kids a small amount for doing chores and extra work. Why pay them? Because I couldn't teach my kids to manage money if they had no money to manage. 5 of my children watch their money and are savers. 1 child is married to a man that has a real good job and she spends money foolishly. 2 of my kids don't manage their money at all. They live from paycheck to paycheck and married people that are the same way. I've tried to teach them, but they aren't interested.

Knowing how to be spend and save wisely and live within your means is one of the greatest gifts you can give your children. President Johnson gave us welfare. He did more to destroy the family than anyone else in history.

Good luck to you and yours.

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answers from Houston on

I do very well with finances today. Every year, I spend time putting a high level budget together. Every once in a while, we will get a little out of control on spending which then we revert to the spending in cash method to get us back in line.

Growing up, I was never left wanting but...I never had an abundance of cash. Every fall and spring we got to go clothes shopping. My mom would set a budget ($400) for each of us, my brother and myself. She would take us shopping...never did she give me the money or credit card. Also, I had very expensive taste and quickly learned that if I bought a $100 blue jeans that meant I was only left with $300 to get other things and if everything I wanted was $100, I would be left with 4 items for the entire semester. My mom never went over budget so that is all I had.

When it came to going out, I got $10 a week for allowance. My mom would give me another $10 to go to the movies and dinner but all in all that was not very much. My friends would have about $50 to $100 on them. This was what their parents gave them to go out. I was envious but my mom did not see any reason why I should have that much money to go to the movies (if that is really where I was going). My parents are very well off so they could definitely afford to give me more cash but did not. Anything I wanted outside of allowance or clothes budget i.e. nintendo, walkman (ha, ha), I had to wait for a special occasion i.e. Christmas, birthday, report cards or I had to raise the money by doing special chores.

College: I got $150 in spending money the entire time I was at college. My parents paid for tuition, rent and sorority. Everything else had to come out of my spending money i.e. utilities, food, bar hopping.

I did lifeguard in high school and college to earn extra cash but I only needed extra cash to go out and shopping trips.

My parents did pay for summer camp and anything extra curricular like sports or music lessons.

I hope this helped.

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answers from Los Angeles on

What a great question. My parents gave me an allowance that was generally below what my friends got. A third of the allowance had to go into "savings" - basically, a special piggy bank that we only used for special, big-ticket items that we wanted. When I started working as a teenager, I had to put a third of my earnings into savings. My parents paid for all "necessary" things, such as clothes and school supplies, but as I got older, I became responsible for paying for discretionary activities, such as movies with friends.

At the time, I was torn as to whether the way my parents handled our allowance was unfair or a good idea - now, I know it was a brilliant one. .I learned the value of a dollar early and how to save for things I really wanted. To this day, I remain careful with money, don't spend on things I know I can't afford or don't really need, and always put money aside in savings - it's just second nature to me now because I've done for 30 years. I plan to do the same with my kids, but also will require them to set aside a certain percentage for charity.

Good for you for wanting to teach your son good money skills - that is something that will benefit him his whole life!

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answers from Rochester on

I had an allowance. Monthly. I am excellent at planning a monthly budget...but that's simple. Make a column of all your expenses, including what you want to save, with a total at the bottom. Compare it to your income...however much you have left over, after ALL your bills, shopping, extras, saving, etc...that's your "piss away money."

I think a monthly allowance is best, because really, that's the way life the month. :) However, my child who's old enough doesn't get an "allowance" so to speak, because we can't afford it. If she does something really extra to help out, I will give her some change for her piggy bank. If there's something small she wants, we try to afford it...if there's something big, she has to save. She recently spent almost six months to save seventy dollars to buy a castle toy she wanted, and I think she really values it because SHE saved for it.

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answers from Houston on

I never had an allowance. As soon as I was old enough I got a job, before that I babysat. My parents bought me necessities but extras I mostly paid for.

My son (10) gets an allowance for doing chores. If he doesn't do his chores, he doesn't get an allowance. Half of his allowance goes into savings, the other half he can spend or save for something he wants. His savings he isn't allowed to touch for now. So far this is working, and he's helping a lot more around the house (the more chores he does the more money he gets!) This is a big help since we have a new born in the house.

When we were younger we weren't all that great with finances, we got into debt. A few years ago however, my husband discovered Dave Ramsey and went to his Financial Peace seminar, since then we have no debt and are saving for the future. It's been great! We also have Financial Peace Junior but haven't used it with my son yet so I'm not sure how it is, but I'm sure it's a good tool.

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