Should I Give My Children an Allowance?

September 23, 2019

The following was written by Shawn Jacques, a Private Wealth Advisor located in Blue Trust’s branch office in Chicago, Illinois.

As a financial advisor, I know that managing money is central to living in our society; as a parent, I am always looking for ways to train and develop my children to become productive individuals. The Bible instructs us in Proverbs 22:6 to “train up a child in the way they should go.” I’ve often been asked for ideas on how to pass on biblical principles to the next generation, specifically as it relates to the value of work and money.

My wife and I use a simple formula when our young kids receive money as gifts – give first, save next, then live off the rest. However, we realized over time that they wouldn’t have much practice managing money until they can get a job. As a result, we were looking for ways to teach them about handling money while they were still young.

In general, I wasn’t attracted to the idea of an allowance at first…until I read the book The Opposite of Being Spoiled by Ron Lieber. In this book, Lieber reminded me that some of the traits I want to see in my kids (generosity, patience, perseverance, delayed gratification, and more) could be taught using money. As I reflected on his comments, my perspective shifted from viewing an allowance as free money to seeing it as a training tool.

Families can choose to use money as a tool in various ways. One way to use money as a teaching tool could be to assign chores that children are compensated financially for completing. For our family, my wife and I feel that chores are an important part of our children contributing to our home, so we do not pay them to do chores. Other families may find doing so to be helpful in teaching their children to view work and money biblically. However you choose to give your children an allowance, whether it’s tied to a task or not, it can help them develop important character traits early in life. In his book Your Life…Well Spent, Russ Crosson mentions the importance of children understanding that everything comes from God and that giving acknowledges His ownership. This perspective is something my wife and I value, and we would love to see our children grow to be generous givers.

If you are pondering whether an allowance is a good idea, you may have some questions. As an advisor (and as a parent), below are my suggestions to some questions I’ve been asked regarding allowances:

• When should we start? The sooner the better. I think in the early years of elementary school is reasonable.
• How much should we give? I would recommend linking it to their age, or if you so choose, the task they complete. For example, you could give them an amount equal to their age every week, every two weeks, every month, or varying financial compensation depending on the chore. You will have to figure out what is reasonable for your situation.
• When should we stop? To be honest, my wife and I haven’t figured that out yet. Right now, we are thinking 16 is the age at which we might expect them to get their first job, and at that point we would no longer give them an allowance.

At Blue Trust, we believe money is a tool that God gives us. As parents, we can use allowances to train our children in an area that will become an important component of independent living. Teaching our children will always be a journey, and as with most things, teaching can come in various forms and methods. What may work for one family may not work for the next. I would encourage you to do what is right for your family and your family’s individual situation, keeping in mind the goal of raising a next generation that is generous, productive, and sets their hope on something much bigger than the present world.

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