Mom, I Need Money!

Mindy at age 10 is always asking for money.  Her parents listen to each request and finding most of them reasonable, usually give her the cash.  She wants ice cream, dance school t-shirts, pens and pencils for school, a new jacket that is cooler than the one she has, a toy while they are at the toy store, a mall trip with her friend’s family, music for her ipod, a new book……

I asked them how much money they were giving her each month.  Neither one knew but looking somewhat sheepish, predicted it might be about $100.  I asked them to give it some thought, writing down everything they could remember for the last month.  When they returned, they reported it was $210. Wow, $50 a week for 100% discretionary funding.  I know many adults who don’t have that kind of free money.

Mindy does not get an allowance so the only way she can access money is to ask for it.  Her parents know this and assume that as good parents, they should fund all reasonable requests. 

My biggest concern with this approach is that Mindy is not going to have an eternal fountain of cash available to her all her life.  And she is not learning how to cope when that bountiful geyser dries up.  She will have no skills with budgeting or delayed gratification.  How will she decide whether to save for groceries or go to the movies?  What will she do when she doesn't have the rent money? How angry will she be when her entry level salary gives her almost NO discretionary cash? 

Doesn't she deserve better than that?

Allowance isn't just about having money to spend.  It is about learning to be RESPONSIBLE for budgeting it carefully, to be RESOURCEFUL when you want more money than you have and to become gradually INDEPENDENT in money matters so you can be an adult when the time comes.

So here is the magical allowance plan I suggested for Mindy’s parents.  Give her an allowance of $25 per week and let her know that is all the money you are going to give her for discretionary spending.  That cuts her current standard of living in half, but it is STILL more money than a lot of adults have.

Tell her allowance comes at a specific time each week and you will not advance it.

Tell her that sometimes you have to save for things you want and it may take a few weeks to get them.

 

If she wants more money for a particular purpose, brainstorm with her about how she might get it.  If there is a BIG job at your home that isn't a part of routine home operations (such as painting the fence), you might offer to pay her for it.  Maybe she can ask for the item for her birthday or for Christmas.

As she gets older, I would add more money to the weekly allowance, but I would also add more things that she is responsible for purchasing herself (i.e. school supplies, clothes beyond the basics, school lunches, dues/registrations for any organizations she is in). 

Many parents of 10 year olds are not able to give them $25 each week in allowance and I am not suggesting they should.  For Mindy, we just needed to get her back on track in learning how to handle money.  The dramatic decrease gave her the wakeup call she needed to learn that most things in life are not free.

The point here is to help your child learn to handle money responsibly using whatever amount of allowance you can afford and believe in. 

So….. “Mom, I need money” becomes “Mom, I need a bigger allowance”.  To which you may cheerfully reply, “Yeah, me too!”