How do you do allowance?

[testifyoncruises]

Do you base your child's allowance on performance or just give it to them for money management skills or do u do a combo of both.

Our child has age appropriate chores that must be completed to get her allowance. It started as a weekly pay based on her equivalent grade in school.

For K she got .50 a week, now in 1st she gets $1 a week.

Her chores have included things like picking up her room, making her bed, emptying the dishwasher, cleaning dog poop. There are also opportunities to earn extra doing things like raking leaves and helping us with our work like stuffing, sealing and stamping envelopes.

No work though, and her money is reduced to the point of not being given. My DP and I work for ourselves and our pay is based on a ROWE system. We believe her allowance to be directly tied to the results of her labor.

We do have our own TOC match plan to encourage her to save. On her birthday and on Christmas, she receives double of what $$ she has saved and not spent. This goes into her own UGMA account less a starting amount of $50 every six months.

She cannot spend her money on food, but if it is a game or a stuffed animal she wants outside of her birthday or christmas, to getting some cheap toy in the quarter machine she must use her money.

 

[JerseyJanice]

Her chores have included things like picking up her room, making her bed, emptying the dishwasher, cleaning dog poop.

You get all of that out of her for $1 a week! My kid would tell you to keep the $1.

 

[MiniGirl]

Our children get $1 for each year in their age. (For example, the 7 yo gets $7/wk.) From that, they are required to give at least 10% to the church and save at least 20 - 30%. The rest they can spend with our approval or save for a special toy.

We do not tie allowance into chores. After all, when they are older and have outside jobs, they will no longer be willing to do they chores because they won't need the money. I, however, will still need them to do the chores. I have chores that must be done and I don't get paid to do them, and as they get older, nobody will pay them to keep their own places clean. No chores are something you do for the good of the family.

There are plenty of ways to "do" allowance. I don't think any of them or right or wrong. It is just works best for your family and with what your goals are for giving an allowance.

 

[just4today]

My first grader slops the hogs, chops a cord of wood, and has breakfast ready for me when I get up. She also changes the oil in the truck every 3000 miles. She doesn't need an allowance. She does it for the pure joy of it

 

[golfgal]

At our house all of that is done because you are part of a family and that is what you do. If you want to earn money you have to do something out of the ordinary--also know as, stuff mom doesn't like to do--scrubbing the kitchen floor for example. . We don't give the kids an allowance, they have the opportunity to earn money though.

I also have to say that an UGMA is not a very good idea but to each his own.

 

[testifyoncruises]

I also have to say that an UGMA is not a very good idea but to each his own.

And in your glorious wisdom, why do you say that?

 

[Magic Mom]

I don't base allowance on chores. You do chores because you live here and contribute to the mess. I give allowance because she needs money to buy herself things and go places. DD is 10 and she gets 35.00 a month.

She does have to do extra (either around the house or math/ reading practice) to help earn her way to summer camp this year.

 

[JerseyJanice]

My first grader slops the hogs, chops a cord of wood, and has breakfast ready for me when I get up. She also changes the oil in the truck every 3000 miles. She doesn't need an allowance. She does it for the pure joy of it

I should answer the OP's question. My 13 yo DS gets $10 a day for lunch and whatever. He saves whatever he doesn't spend during the day and uses it toward his weekend recreation activities--stuff like going to the mall, the golf center, the bowling alley, varsity basketball games, etc.

FWIW, we got our dog when DS was 6, and I wouldn't allow him to clean up Max's poop then or now. Our dog is very big (120 pounds), and so his poops are huge. I wouldn't expose a little kid to that many germs. I make my husband do it.

 

[golfgal]

And in your glorious wisdom, why do you say that?

Because of it's limited use and complete access to the funds when your child is 18 or 21 depending on the account and you have no say over what they do with that money when the time comes. I prefer to have funds where I have control over the distribution not what the government says I can do with the money. What if you needed access to that money early or what if your perfect 1st grader ends up with a drug problem and ends up spending all that money on drugs-nope, sorry, don't like the accounts.

 

[Art 1]

My youngest is now a senior in HS, she does small things in the house but her main job is studying. We keep 2 or 3 hundred in her checking acct so she can use her debit card and up to $50 on her lunch card at school.

 

[testifyoncruises]

Because of it's limited use and complete access to the funds when your child is 18 or 21 depending on the account and you have no say over what they do with that money when the time comes. I prefer to have funds where I have control over the distribution not what the government says I can do with the money. What if you needed access to that money early or what if your perfect 1st grader ends up with a drug problem and ends up spending all that money on drugs-nope, sorry, don't like the accounts.

We feel a 529 offers far more limited use and the government says what the money can be used on. We are funding our retirement first anyway so a 529 never made sense.

I believe in letting my child learn from her own mistakes through her own actions. Though we don't live our life on what if's, I will counter what if she wants to travel the world and get an education not found in books? She will have a great start to do so. What if she decides to buy her first house, she will be able make that investment.

I love UGMAs far more than anything else on the market. The fund we have them in historically has outperformed anything available in any 529 in any state. The management fees are far less in this particular situation which is why we went with it.

The minute she starts earning real dollars, we will encourage her to save into a ROTH because if she contributes from 15-22 and then stops, she will have a million by the time she needs it.

Back to the original question, I am glad to see that some people believe in paying allowance only for results.

 

[ZephyrHawk]

There's nothing wrong with $1 per week for her age. What does she have to buy as a 1st grader? No, I had a $2 allowance to start, but it stayed that way until about 3rd grade, then went to $5, then $10 a few years later, the finally $20.

My parents did not tie my allowance to chores. I was made to understand that chores must be completed regardless of pay. Chores are a responsibility owed to the family you are a part of, I also didn't get paid for grades.

 

[golfgal]

We feel a 529 offers far more limited use and the government says what the money can be used on. We are funding our retirement first anyway so a 529 never made sense.

I believe in letting my child learn from her own mistakes through her own actions. Though we don't live our life on what if's, I will counter what if she wants to travel the world and get an education not found in books? She will have a great start to do so. What if she decides to buy her first house, she will be able make that investment.

I love UGMAs far more than anything else on the market. The fund we have them in historically has outperformed anything available in any 529 in any state. The management fees are far less in this particular situation which is why we went with it.

The minute she starts earning real dollars, we will encourage her to save into a ROTH because if she contributes from 15-22 and then stops, she will have a million by the time she needs it.

Back to the original question, I am glad to see that some people believe in paying allowance only for results.

I dislike 529 plans even more, unless it is a grandparent contributing to the fund. Personally we have our kids' college funds in non-traditional "college" funds--money markets, etc. because there aren't the limitations one use and quite frankly since it is our money, we want to have a say in how it is used. If they get enough in scholarship money, etc. and don't need that money I don't want penalties to have to use our money. More power too you if you are ok with your child using that money for drugs.

 

[Dan Murphy]

.......I believe in letting my child learn from her own mistakes through her own actions......I love UGMAs far more than anything else on the market.......if she contributes from 15-22 and then stops, she will have a million by the time she needs it.....

UGMA's work well for that.

And not necessarily, will.



(not to be taken as financial advice)

 

[testifyoncruises]

More power too you if you are ok with your child using that money for drugs.

There you go again only seeing the glass half empty and the water draining out of it. Just have to jump to assuming it will be a negative. The biggest benefit to UGMAs has to do with taxes, but I won't waste my time explaining that one to you.

 

[golfgal]

There you go again only seeing the glass half empty and the water draining out of it. Just have to jump to assuming it will be a negative. The biggest benefit to UGMAs has to do with taxes, but I won't waste my time explaining that one to you.

I am fully aware of the tax implecations on the UGMA/UTMAs and 529s, there are other vehicles that offer the same, if not better, tax treatments for college savings but since you are fully aware of them as well, there is no need to explain them either.

 

[testifyoncruises]

There's nothing wrong with $1 per week for her age. What does she have to buy as a 1st grader? No, I had a $2 allowance to start, but it stayed that way until about 3rd grade, then went to $5, then $10 a few years later, the finally $20.

My parents did not tie my allowance to chores. I was made to understand that chores must be completed regardless of pay. Chores are a responsibility owed to the family you are a part of, I also didn't get paid for grades.

We don't pay her for grades either. We just do not believe in giving money as far as allowance is concerned without work being tied to it.

We don't force her to give but when there is a TFT drive if she wants to participate she has to spend her money. She does have to go with us as part of our volunteer work though. We think that is more effective by seeing me and DP doing it than just talking about doing it.

 

[okeydokey]

We don't tie allowance to chores. The kids get allowance so they have some of their own pocket money to spend and to learn how to manage money. Currently it's $5 a week, 2 to spend how they want, 2 to put in savings account and 1 to donate. They learn to use money like adults do, we spend, we save and we share.

They do chores around the house because they are members of this house and everyone pitches in. At the beginning of every school year we divvy up the chores for the year and that's what they get for the year. If they want to do extra (like wash and vacuum the cars) they can earn extra for that.

 

[taximomfor4]

we do no allowance at all. If dd16 babysits because dh and I are doing work-related (benefits the whole household thing), she gets nothing...but if we are having a fun date-night out, we pay her $10 or so. More a babysitting job than an allowance. But other than that, we don't give the kids any money at all. Maybe we should -- how else will they learn to budget $. But until I have a job, dh and I don't even have spending money so why should the kids. Right now, they are just learning that we have just enough to do a minimum of activities and keep a small house with 6 people afloat.

 

[quentina]

We don't give allowance. My kids are expected to pick up after themselves and do basic tasks.

We take them on vacations.....pay for sports....buy them clothes etc.

If they want something that requires money...as long as we have it, they get it.

My 12 year old does work with my step-dad once in a while. That money goes in the bank. He is not willing to spend his money, just ours LOL.