Allowances

Many people believe that the best way parents can give their children a financial education is to give them practical experience through an allowance, “a sum regularly provided for personal expenses” (Webster’s New Collegiate Dictionary, 1974). As you cannot learn to read without books, you cannot learn how to handle money if you never touch it.

The Bible contains much about training up children in the way of the Lord (for example, Deut. 6:6-7; Ephes. 6:4), and personal finances are as important an area in which to lay down a godly life pattern as any other. There are many general references to handling money in the Scriptures, and many of these can be applied to the raising of godly and wise children. For example, insights such as “Whoever loves money never has money enough” (Eccles. 5:10 NRSV) and Jesus’ comment on the sacrificial generosity of the widow’s offering (Mark 12:41-44) are vital parts of a child’s home “curriculum.” The specific commandments against stealing and coveting that, according to Deuteronomy, are to be impressed upon children are certainly to the point. The passages in Proverbs about money are also applicable (for example, Proverbs 1:19; Proverbs 3:9; Proverbs 13:11, 22; Proverbs 15:16; Proverbs 28:8). Certainly handling personal finances is one of the key ways in which a child needs to be trained. In our increasingly complicated and stressful economic world, as much practice with money as possible before adolescence is particularly essential.

Two Kinds of Allowances

We must be clear on terminology: some parents apply the word allowance only to regular money given to a child that is not tied to any chores but just reflects the child’s membership in the family. Most families expect contributions by the child to the cleanliness of his or her own body and bedroom and usually encourage some participation in household work, but the allowance is never seen as a direct reward for any duties. It is never removed as a punishment for “sins” of omission or commission in the area of chores or personal responsibilities. With this approach, which we might call the true allowance, additional funds can still be received by the child for assignments in the household that they take on voluntarily (for example, grass cutting).

Other families downplay or eliminate the type of allowance just described in favor of a pay-for-work approach. While the parents with this mindset agree that personal hygiene, tidying one’s closet and doing school assignments should be their own reward, they arrange (often in dialogue with the child) regular, age-appropriate duties that are real contributions to the household (for example, dusting, laundry and gardening) to which all or most of the allowance is directly linked. This approach, which could be called the cooperative family economy, clearly puts emphasis on the Scriptures that teach against laziness (for example, Proverbs 10:4; 2 Thes. 3:11-12) and about the dignity of work.

For at least two reasons those taking this approach should not give up on some expression of the true allowance: (1) to avoid turning childhood into a job and caregivers into managers and (2) to help regularize and control the inevitable gifts of money (for small treats) that flow from parent to child during a week. Why not collect these “gifts” into a simple, true allowance and eliminate a lot of bother? On the other hand, for the biblical reasons already stated, true-allowance parents should also pay attention to the value of “money for work,” recognizing that even young children can make a significant contribution to a family economy. In practice the two approaches often come together in child rearing, with a true allowance being emphasized in the earlier years and working directly for a share of the family income being stressed more with teenagers.

Guidelines

There are many specific systems used by parents to manage the distribution of family income. The following commonsense guidelines can be applied by all parents.

Progressive. Increase weekly money as the children get older, with consequently more responsibility for making purchases for themselves (for example, teenagers purchasing clothes, personal grooming products and entertainment). One rule of thumb suggests a number of dollars each week equal to half the child’s age, but each family needs to decide for itself what is realistic and reasonable.

Consistent. It is extremely important to give the allowance regularly, in full and at the same time each week (consider how adults would respond to an employer who operated any differently). Wisdom can be applied to the best timing (Sunday or Monday evening avoids the temptation of Saturday shopping sprees), and extending advances should be kept to a minimum (having to save for a costlier purchase is usually a better discipline).

Independent. The benefit of an allowance as a training tool is maximized if the “allowance” part includes freedom in spending. Though it is difficult to see children “wasting” money on sweets or trinkets, there is no better way for them to learn to make decisions, plan ahead and determine value. Parental guidance or caution is not thereby eliminated, but parents must be prepared to let their children grow through mistakes.

Positive. The temptation to use an allowance as a bribe or punishment (“Do this or else no money”) should be avoided. The important thing is not to change the rules midstream and unilaterally and thus begin to create a negative image around what should be a gift (true allowance) or compensation (cooperative family economy). Other strategies to change a child’s behavior unrelated to the allowance should be used (for example, removal of privileges for breaking curfew).

There will always be differences of opinion about how to handle allowances. For example, some people create complicated ways to distribute the allowance over several categories (tithing, a family “tax” for group outings, long-term savings and personal spending). The most important thing is to involve children as much as possible in setting up the system and the amounts in the context of an appreciation of the overall state of family finances, to embody the practice in wider teaching about God’s will for money and stewardship, and to establish good attitudes and behaviors from the earliest age: “If the groundwork has been correctly laid, there’s little cause to worry” (Weinstein, p. 89).

» See also: Family Goals

» See also: Family Values

» See also: Gift-Giving

» See also: Money

» See also: Stewardship

References and Resources

J. R. Peterson, It Doesn’t Grow on Trees (Crozet, Va.: Betterway Publications, 1988); G. W. Weinstein, Children and Money (New York: Charterhouse, 1975).

—Paul W. Lermitte and Dan Williams