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Three mistakes parents make with paying an allowance: #3
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#3: Overcomplicating
Much of the advice out there on allowances and children recommend using some sort of system. On the simple side it involves three jars; one jar for savings, one for spending, and one for charity. I have seen another that recommended up to 7 jars. In this system, in addition to the three already mentioned there would also be a jar for taxes, family vacations, investing, and education. Three jars may be manageable with one child. I have three children. Frankly, I could not imagine where I would put the 9 jars needed to follow this system. Moreover, who wants to spend the time splitting up the allowance into the various jars. It becomes complicated and cumbersome.
So, some have come up with computer programs to do it for you. You don’t even have to use money, just put the amount into the computer program and it will automatically divide the money into how ever many categories you choose. It sounds simple enough. What happens when the child actually wants to spend the money? Do you write the check or charge it and take it off the computer later? I hope you remember to do that.
There are a couple of reasons that I believe this to be a mistake. First, I have yet to meet anyone who followed through for more than six months. (If you are reading this and have followed a similar system for more than 6 months, please email me I would like to talk to you. Seriously.)
Another complication created is a source of tension. Under these systems the parent is dictating the amount for each category. Early on, when a child is under 9 years old, the child may be agreeable. However, what happens in those pre-teen and teen years? Following a system like this opens the door to an additional area of conflict. What if your tweens favorite charity is “Revlon” or “Hannah Montana”? For me, I am looking for more areas of strengthening the relationship with my children. I am not interested in creating new sources of tension. Between nap time, bed time, dinner time, homework, dating, when to wear make-up, and a lot of other things that parents must define isn’t there enough inherent conflict?
Finally, it’s easy to get caught up in the splitting of money and forget about the big picture. The main purpose is, presumably, to teach your children about money. If you are dictating all of the terms what are they really learning?
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