Moms Talk: How Do You Handle Allowance?

He gave me a nickel every time I locked the door behind him. 

My dad got up at 5 a.m.  He had a 90-minute commute ahead of him, which involved two trains and 130 steps, and hundreds of students at Music and Art waiting for him on the other end.

I was 7 years old, I was short, and there were two locks involved. I was also a naturally early riser, and maybe this was his way of keeping me off the streets of Brooklyn at that hour. Regardless, it was my very first salary.

I also received an allowance starting in elementary school. My parents used this as a way to educate us about money. It wasn’t a means to get us to comply with house rules, nor was it something to take away when we didn’t behave or cooperate. Rules and chores were to be followed and completed because everyone in the family should contribute. Period.

The allowance amount changed to reflect my needs at each stage—in junior high it covered train fare to and from ballet, a chocolate croissant from Zabar’s, and a little extra in case I wanted to save or go to Roll-A-Palace. In high school, it covered a daily bagel fix from Avenue M and going to the movies or into the city with my friends on the weekends. If I misspent, too bad for me, until next time I got my allowance.  If I wanted something extra, I’d have to do something extra to earn it or get a job. Consumer Reports approves.

I am taking the same approach with my kids, and I like the ways in which it takes the power struggle/guilt issue off the table. They have more independence and are learning how to manage a set amount of money. They are less likely to ask me to buy them things. I am much less likely to feel bad about saying no.

However, many people I know and respect disagree with this approach. They believe kids should receive money on a regular basis only if they complete certain tasks and chores. This is very effective for ingraining in kids that in the future, nothing will be handed to them. As adults, if they want money, they will have to work for it. Suzie Orman agrees with them.

What works for you? How were you taught about money, and how are you approaching allowances with your kid(s)?