Are you one of the thousands of households that started an allowance at some point in the last few years and it just kind of…fizzled out?
You’re not alone. Many parents have told me that they started an allowance that, just like Downton Abbey, ended for one reason or another.
Sometimes they don’t even know why.
Or, sometimes it’s for a very specific reason, such as:
- Because their child thought they were a millionaire and so stopped giving effort towards their household duties to earn more.
- Because it became too inconvenient to keep track of everything.
- Because it was just more convenient to pay for a toy or video game, or whatever else that their kid wanted to buy at the store, rather than to manage an allowance.
No matter what your reasons are, one thing I know for sure: having a consistent system in place that gives an allowance for kids is one of the best ways you can pass on a money education to your child.
Because of that, I’d like to talk about 3 ways to turn your allowance around in your household so that your system not only works for you, but also becomes an awesome vehicle for money education.
An Allowance is Your Child’s Money Training Wheels
First up? Let’s talk about why an allowance is one of the best vehicles you have to teach your child about money.
An allowance in and of itself is not a money lesson for your child. I go into great depths about this point at MoneyProdigy.com, but suffice it to say – an allowance is only a money lesson when it’s paired with money conversations and some other oversights from you, the parent.
Yet, an allowance is still one of the top vehicles to use when giving your child a money education. Why is that?
A well-setup allowance is your child’s money training wheels because:
- It gets money into your child’s hands so that they can start the cycle of spending it, making a mistake, learning from it, and trying something different (or not – repeating the cycle is a lesson as well!).
- Handling money and making their own decisions helps them build money confidence over the years, something I’m sure you can appreciate the importance of since you’re an adult and have to handle money and sticky money situations all the time.
Now that you know why an allowance is an awesome way to teach your child about money, let’s move on to how to make your allowance system work – whether it’s been on the sidelines for the last year, or never really got a start at all.
Note: see how I said allowance system? That wasn’t by accident. There are 5 allowance systems that you can choose from, and I’ve created a free one-page allowance plan that will help you to choose which is best for you.
3 Ways to Turn Your Kid’s Allowance Around
No matter where you’re at with your allowance system right now, by making some of the changes we’re about to talk about, you can see things turn around. In fact, making a few of these tweaks might make you even like giving an allowance, instead of wondering what the whole point is.
Choose from below for what went wrong your last allowance-go-round, and see if you can’t make a complete turnaround.
Allowance Problem: You Weren’t Consistent with Your Paydays
Consistency is king, no matter which allowance system you choose to go with – and it’s one of the top reasons why allowances often fail or just kind of fade away.
The reason why consistency is king? If your child knows they can count on money, then they’ll start doing some cool things with it – like actually planning out their spending, or saving up for something.
When an allowance is inconsistent, it makes it really difficult to do anything planned with it (just imagine if you tried to save up for a trip to Disney world without ever knowing if or when you were being paid – you’d probably just give up, and spend all your money as it comes in because you don’t know when more is coming).
The Turnaround to Make it Consistent: A great way to help with making your allowance consistent is to write your plan down. There are four components to an allowance plan, and you’ll want to cover each – your money goals, your allowance foundation, your payday details, and the money responsibilities you’ll be turning over to your child.
Allowance Problem: It Was too Inconvenient to Follow Through
You need an allowance system and payday system that you’ll follow through with. So, you need to nail down what will work best for your family – are you going to go cashless with an allowance app, or is swinging by the atm something you do, anyway? Who will keep track of when payday is, and the amount?
The Turnaround to Make it Convenient for Your Household: You can do a few things here. First up, was your consistency issue because of the type of payment you were giving (i.e. you were giving cash, but could never remember to get to the atm)? Or was it a problem of the day of the week and you just didn’t have the money on you a few times? Change up your payment method from cash to an allowance app, or consider syncing your child’s allowance paydays with your own paydays this next time around.
Allowance Problem: You Didn’t Know Why You were Doing It
If you don’t know why you’re giving an allowance – other than because it seems like everyone else is doing it and you should be, too – then you’ll likely lapse on the whole thing.
Without tying your allowance system in with some of the money education goals you have for your child, you will likely see this as a colossal waste of money (specifically when your child makes mistakes or spends their money “frivolously”).
The Turnaround to Make it Meaningful: You need to tie your entire allowance system around a money lesson you want to teach your child. That means, you build the money lesson into your actual system. For example, if you want your child to start to learn how to save money, then you’ll need to help them through goal setting for kids as well as tweaking the amount you give them so that they have to save money in-between allowance payday cycles in order to get what they want (i.e. forced savings!).
As you can see, when you set up an allowance system rather than just start giving an allowance, things get much more interesting. Suddenly, you have started your child’s money education, you’re helping your child build money confidence, and you’re doing it in a way that is more convenient for your household. What an awesome way to pass on all those money lessons you wish YOU had gotten growing up from your own parents!
Author Bio: Hey-ooo! I’m Amanda L. Grossman from MoneyProdigy.com, where I teach kids aged 8-13 how to manage their money through Money Educational Adventures (like the Mt. Everest Money Simulation). I’m a Certified Financial Education Instructor, and won a 2017 Plutus Foundation grant to bring my creations alive.