MONROE - A lesson in fiscal responsibility or teaching kids a sense of entitlement?
There's no pat answers when it comes to allowances for children. Opinions about allowances differ as widely as families do: Some families think allowances help prepare children by teaching them the basics of money management, while others feel allowances can lead to a sense that money is the payoff for being part of the family.
Laura Hughes of Monroe is one mother who agrees with giving children allowances. She started giving her two children, now 12 and 16, $5 each week when they were about 10 years old. Now they each get $20 every two weeks - "just like a paycheck," she said.
The money is for extras - something they want to buy or to go to a movie.
"It's for things above and beyond" everyday things, Hughes said. And the children are expected to perform some household chores for their allowance, primarily taking out garbage and recyclables and unloading the dishwasher.
For Hughes, it's a way to instill the value of the dollar.
"It's a way for them to learn how to budget the dollars they have. It's setting the tone for coming into the real world," she said.
Hughes puts their allowance in an envelope. Sometimes, they will have money left over, depending on what's going on in their lives, she said. Her 16-year-old now has a job and is earning her own money. Hughes said her daughter pays for her car payment, gasoline and insurance - and still has untouched allowance money at times.
That is exactly what child and money experts who advocate giving allowances want to have happen.
"Allowances are an effective way to give children experience in managing money," agreed Linda Boelter, a certified financial planner and family financial management specialist for the University of Wisconsin-Extension. "Instead of getting money 'on demand' whenever they need it, children with regular allowances can learn to plan ahead, to anticipate spending needs and make choices about what's most important."
But when should parents begin an allowance for their children? Boelter said most children are ready for a regular allowance by the time they are 6 to 8 years old.
Some things to consider:
• Allowances should be paid on a regular basis. Once a week is usually best, especially for younger children who may not be able to budget their money for a longer period of time. For high schoolers, an allowance every two weeks or even every month can help them learn to plan ahead and budget their money.
• Set ground rules so your child knows what he or she is expected to buy (for example, school lunches or clothes) with the allowance.
• Establish the amount of allowances based on what the child is expected to buy for himself, plus discretionary spending such as treats and entertainment. The key is to make the amount small enough to require choices, but large enough to allow for choices, Boelter said.
• Include enough and establish a savings plan. Some parents also institute a policy of some money being set aside for charitable giving.
• Don't tie receiving an allowance to good behavior or good grades, Boelter recommends. Children tend to see their allowance as a bribe or punishment when doing so and it can give money too much emotional or moral significance.
One of the more controversial aspects of allowances is whether to tie them to household chores or jobs. Some parents do this to instill a work ethic in their children.
"On the other hand, it can result in situations where you are forced to dock their allowance when chores aren't done," Boelter said. "That becomes a punishment, not a money management lesson."
Some parents opt to forego allowances altogether.
Bill Gross of Monroe has four children ages 17 to 9 - and not one of them gets an allowance.
"It's never really been an issue," he said. The kids are expected to pitch in and help out, but know "it's not something you do for money."
Gross said he did give his children $10 one time and then turned around and charged them for the steak dinner they were eating. "They found out they were a few dollars short," he laughed.
As a fifth-grade teacher at Parkside, Gross hears students talk about allowances from time to time. He said once in awhile he'll hear a student say they will get extra money for receiving a good grade.
That's a practice Gross doesn't employ.
Instead, he wants to teach his children, and his students, that pitching in or helping someone should be done because "it's the right thing to do," he said.
There's no pat answers when it comes to allowances for children. Opinions about allowances differ as widely as families do: Some families think allowances help prepare children by teaching them the basics of money management, while others feel allowances can lead to a sense that money is the payoff for being part of the family.
Laura Hughes of Monroe is one mother who agrees with giving children allowances. She started giving her two children, now 12 and 16, $5 each week when they were about 10 years old. Now they each get $20 every two weeks - "just like a paycheck," she said.
The money is for extras - something they want to buy or to go to a movie.
"It's for things above and beyond" everyday things, Hughes said. And the children are expected to perform some household chores for their allowance, primarily taking out garbage and recyclables and unloading the dishwasher.
For Hughes, it's a way to instill the value of the dollar.
"It's a way for them to learn how to budget the dollars they have. It's setting the tone for coming into the real world," she said.
Hughes puts their allowance in an envelope. Sometimes, they will have money left over, depending on what's going on in their lives, she said. Her 16-year-old now has a job and is earning her own money. Hughes said her daughter pays for her car payment, gasoline and insurance - and still has untouched allowance money at times.
That is exactly what child and money experts who advocate giving allowances want to have happen.
"Allowances are an effective way to give children experience in managing money," agreed Linda Boelter, a certified financial planner and family financial management specialist for the University of Wisconsin-Extension. "Instead of getting money 'on demand' whenever they need it, children with regular allowances can learn to plan ahead, to anticipate spending needs and make choices about what's most important."
But when should parents begin an allowance for their children? Boelter said most children are ready for a regular allowance by the time they are 6 to 8 years old.
Some things to consider:
• Allowances should be paid on a regular basis. Once a week is usually best, especially for younger children who may not be able to budget their money for a longer period of time. For high schoolers, an allowance every two weeks or even every month can help them learn to plan ahead and budget their money.
• Set ground rules so your child knows what he or she is expected to buy (for example, school lunches or clothes) with the allowance.
• Establish the amount of allowances based on what the child is expected to buy for himself, plus discretionary spending such as treats and entertainment. The key is to make the amount small enough to require choices, but large enough to allow for choices, Boelter said.
• Include enough and establish a savings plan. Some parents also institute a policy of some money being set aside for charitable giving.
• Don't tie receiving an allowance to good behavior or good grades, Boelter recommends. Children tend to see their allowance as a bribe or punishment when doing so and it can give money too much emotional or moral significance.
One of the more controversial aspects of allowances is whether to tie them to household chores or jobs. Some parents do this to instill a work ethic in their children.
"On the other hand, it can result in situations where you are forced to dock their allowance when chores aren't done," Boelter said. "That becomes a punishment, not a money management lesson."
Some parents opt to forego allowances altogether.
Bill Gross of Monroe has four children ages 17 to 9 - and not one of them gets an allowance.
"It's never really been an issue," he said. The kids are expected to pitch in and help out, but know "it's not something you do for money."
Gross said he did give his children $10 one time and then turned around and charged them for the steak dinner they were eating. "They found out they were a few dollars short," he laughed.
As a fifth-grade teacher at Parkside, Gross hears students talk about allowances from time to time. He said once in awhile he'll hear a student say they will get extra money for receiving a good grade.
That's a practice Gross doesn't employ.
Instead, he wants to teach his children, and his students, that pitching in or helping someone should be done because "it's the right thing to do," he said.