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Allowances & Wants/Needs

I was talking with the guy who introduced me to FDR the other day about parenting, and we started wondering about how to teach children how to handle money.  I'm new to this forum, but I've been listening to FDR for about 8 months now, and I tried to do a search on this topic here on the forum before posting.  I apologize if I've overlooked a previous discussion on this, and if any of you could point me to previous discussions that address these questions, I would be very grateful.

 

The topic we were considering boiled down to two main questions:

 

1. Assuming a child should get an allowance (feel free to debate that assumption if you think it incorrect), should that allowance be directly tied to contributing to household chores, or should the allowance be independent of chores - meaning that parents should teach that some work worth doing, especially within a home or to support family, isn't always going to have direct monetary rewards.

 

2. Clearly a parent should provide for all of a child's "needs;" the following question is concerning extra "wants" like a video game, a band tshirt, a first car, or a candy bar.  If a parent has plenty of expendable income and can and does buy his child mostly anything extra that the child asks for, is the parent robbing the child of the experience of the allowance actually being a useful learning tool?  If the child doesn't have to learn how to prioritize his "wants" or doesn't have to learn to delay gratification with money aka "saving up for something he wants more" then it seems his parents will have done him an educational disservice.

 

If this is true, then how should this hypothetical wealthier parent make sure that his child still learns these lessons?  Surely hands-on active learning is preferred whenever safe/healthy, but if that's the case in this situation too, would the parents then have to make family rules to not buy certain types of "wants" for their child even if they can easily afford them, just to make sure that the allowance is actually teaching the child something smart about money, saving, and delayed gratification?  What types of things should go on this "budget for it yourself if you want it badly enough" list, because I doubt if anyone would advocate that literally ALL of a child's "wants" should go on this list.  Right?

 

This seems like something important to decide early and remain consistent on if it is the case.  What do you guys think?

 

 

 

 

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1) I would probably have a base level of allowance, and give opportunities to earn more

 

2) no way should you buy them everything/anything that they want, even if you can afford it

 

learning to budget their money, prioritise what to spend it on, and saving it up for bigger purchases, is important. 

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I know several people from wealthy families (8 figures net worth) and its fairly easy to see how the luxury has affected them, in some cases to the point of being utterly useless and not able to work at all in any capacity.

The worst case was sent to the best schools in the area, wanted for nothing, but was starved of any real relationship with his father. He never had to do anything his whole life and now in his mid-30s, his low point was being fired from washing dishes (probably has a 120+ IQ) and was (still is) on a monthly stipend which he used to live in a disgusting apartment, sleeping on a mattress balanced on some wooden pallets, surrounded in rubbish. His monthly stipend has been specifically described as a means to keep the family name out of the job center (benefits office).

This description fits him perfectly:

http://youtu.be/kPGofMn0ktI?t=17m00s

Another has a Ph.d (state funded). After doing it he decided that he was no longer interested in the topic of his 7-year uni. education and decided to work in his father's business. He's now being bought a house to live in.

Another is currently independently successful, though he's had many parental boosters and has a big network to fall back on which will ensure a continuing luxurious life. The most recent parental booster was having a house bought for him. What's made the difference here is although he was raised within material comfort his father was tough with him in a way and his father's general enterprising nature has rubbed off on him.

Another has had a house bought for him and is currently having a breakdown because he can't deal with the ever day trials that many others don't have ways out of via parental bail-out.

These people don't see the high-end value of all that has be hauled to and dumped at their feet.

My personal preference is to have the children working at the house, cleaning etc. They'd probably be paid for this. But by the age of about 12 I'd expect them to be economically viable enough to be able to work for me making a decent adult wage. At this point someone else could be hired to do their former menial tasks. By the time they are about 18, I'd expect them to be able to buy a house outright and leave home.

The key is to make sure your children are regularly challenged and earn what they receive. Stefan encapsulates this perfectly when he says, "resistance builds strength". Just as there is a few year speech-window that if you miss, you will never be able to speak, there is also in independence window. If someone is not challenged in that period, it's essentially impossible for them to be anything other than a dependent.

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1) I would probably have a base level of allowance, and give opportunities to earn more

 

2) no way should you buy them everything/anything that they want, even if you can afford it

 

learning to budget their money, prioritise what to spend it on, and saving it up for bigger purchases, is important. 

 

I agree with neeeeeeeeeeeeeeeeeeeeel on this. It is the duty and responsibility of a parent to fundamentally provide two things for their children, unconditional love and to prepare their children to face the world (to become their own parents). To purchase everything a child ever wants without them working for it would circumvent necessary adversity to challenge and promote growth.

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I personally wouldnt give a child allowance for household chores. That seems to just teach them they get money for doing things they should be doing so the place they live in stays in order. Maybe you can hire your child to be the garbage man, that would make more sense, however, there will probably be backlash for that. I remember Trump Education Secretary Pick got criticized for "bring back child labor"

http://www.huffingtonpost.com/entry/betsy-devos-child-labor-acton_us_5836eb7fe4b000af95edf12e 

I would rather give my child a finance book to learn about money. I think warren buffet started reading his investing books at age 7 or so and bought his first stock at 11

Both my parents were small business owners. They offered me to work and I would either accept or decline. I was around 8 or so when I worked in my moms shop and 12 or so when I worked with my dad in construction. Then at 15 I started my own business. Once I understood finances Its hard to be spoiled as you actually know the value of things.

So, I personally see no issue giving a kid what he wants, as long as he knows the value of it and what it takes financially.

It looks like there is some research on the idea of if child allowances are beneficial or harmful 

http://lewismandell.com/child_allowances_-_beneficial_or_harmful

Anyways, I know a little about money but as far as being a parent im clueless. So, please let me know your thoughts on this :) thanks
 

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I appreciate your thoughtful replies so far! Thank you! :)

 

It seems intuitive to me to provide a small allowance to teach basic money skills by using a scale easier for a child to understand, have most chores be mandatory and not tied to money, and provide other chore opportunities that are paid for extra money.

 

My parents also did something I think was cool. As we got older, the frequency of allowance giving was lessened in order to build our saving and budgeting skills. So around age 8, we started getting allowance quarterly instead of bi-weekly. By age 12, we got a whole year's allowance at the beginning of the year in the form of money in a fake checking account - the bank being my parents. If I wanted some cash, I'd have to write a check made out to "cash," do the appropriate subtraction in my fake checkbook, give the fake check to my parents, and then while my decision on how/when to spend the $ was always ultimately honored, my parents were able to discuss the decision with me at the time of my "withdrawal."

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I appreciate your thoughtful replies so far! Thank you! :)

 

It seems intuitive to me to provide a small allowance to teach basic money skills by using a scale easier for a child to understand, have most chores be mandatory and not tied to money, and provide other chore opportunities that are paid for extra money.

 

My parents also did something I think was cool. As we got older, the frequency of allowance giving was lessened in order to build our saving and budgeting skills. So around age 8, we started getting allowance quarterly instead of bi-weekly. By age 12, we got a whole year's allowance at the beginning of the year in the form of money in a fake checking account - the bank being my parents. If I wanted some cash, I'd have to write a check made out to "cash," do the appropriate subtraction in my fake checkbook, give the fake check to my parents, and then while my decision on how/when to spend the $ was always ultimately honored, my parents were able to discuss the decision with me at the time of my "withdrawal."

 

I dont think mandatory chores are the way to go

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I dont think mandatory chores are the way to go

Why not? It's important for children to learn how to pick up after themselves because no one's going to clean up after them all of their lives, unless they grow up to be rich and hire servants to do their chores for them.

 

The way I was raised about chores wasn't ideal. When I had chores to do, I would rather play, read, or watch TV than do chores. That always got me a scolding or punishment, and I was called "lazy," which had (and has) some truth in it. Even now, I do my chores, but I procrastinate on them. Of course, I can get away with this because this time, there's no one around to breathe down my neck about cleaning up on a certain schedule. That's why I can't live with anyone since they may find my habits annoying.

 

Even though I'm a bit lazy about it, at least I know how to clean up after myself. It wouldn't be good for a kid to grow up and get their first apartment and have a panic attack because they don't know how to wash dishes or do laundry. Calling them "lazy" won't help them, yet it's good for them to learn self-sufficiency somehow. How would you go about it? I'm open to hearing your ideas.

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Why not? It's important for children to learn how to pick up after themselves because no one's going to clean up after them all of their lives, unless they grow up to be rich and hire servants to do their chores for them.

 

The way I was raised about chores wasn't ideal. When I had chores to do, I would rather play, read, or watch TV than do chores. That always got me a scolding or punishment, and I was called "lazy," which had (and has) some truth in it. Even now, I do my chores, but I procrastinate on them. Of course, I can get away with this because this time, there's no one around to breathe down my neck about cleaning up on a certain schedule. That's why I can't live with anyone since they may find my habits annoying.

 

Even though I'm a bit lazy about it, at least I know how to clean up after myself. It wouldn't be good for a kid to grow up and get their first apartment and have a panic attack because they don't know how to wash dishes or do laundry. Calling them "lazy" won't help them, yet it's good for them to learn self-sufficiency somehow. How would you go about it? I'm open to hearing your ideas.

 

 

Perhaps its the word "mandatory". I dont think chores should be mandatory, as in "you must do them, or else" or "I will force you to do them". I would prefer that children learn to value doing chores, and understand that its useful to do them,and good to contribute to the running of the house. I dont think they will learn that if chores are made mandatory

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Perhaps its the word "mandatory". I dont think chores should be mandatory, as in "you must do them, or else" or "I will force you to do them". I would prefer that children learn to value doing chores, and understand that its useful to do them,and good to contribute to the running of the house. I dont think they will learn that if chores are made mandatory

 

Oh, alright. Thanks for explaining your view. That makes a lot of sense.

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Thanks for the additional input, and I'm sorry about using the word mandatory - I should have realized it would probably be a trigger word for a lot of folks here, and even the "non-optional" idea behind that word is taboo too, I'm guessing. I'm still getting used to the voluntaryist vernacular along with some of the ideas.

 

So I guess the idea is that if you explain to a child that a chore is an important part of being a member of the family, and the reasons behind doing the chore itself, that the child will voluntarily reliably perform the chore, right?

 

It's hard to wrap my mind around this. Do any of you have direct experience with this working on its own, or do you have to back it up with non-violent consequences like not being allowed to go out with friends or watch tv until the chore is complete?

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Thanks for the additional input, and I'm sorry about using the word mandatory - I should have realized it would probably be a trigger word for a lot of folks here, and even the "non-optional" idea behind that word is taboo too, I'm guessing. I'm still getting used to the voluntaryist vernacular along with some of the ideas.

 

 

 

No one is triggered by the use of the word mandatory, and you dont have to apologise for using it.

 

 

 

So I guess the idea is that if you explain to a child that a chore is an important part of being a member of the family, and the reasons behind doing the chore itself, that the child will voluntarily reliably perform the chore, right?

 

 

 

 

Kind of , I suppose, although theres something in your wording that bothers me. Its not a magic spell that you use to get compliance..

 

It's hard to wrap my mind around this. Do any of you have direct experience with this working on its own, or do you have to back it up with non-violent consequences like not being allowed to go out with friends or watch tv until the chore is complete?

 

 

Those arent really consequences though, are they? They are punishments, or coercive ways of enforcing your will. Consequences are "if I jump off a building, I will fall due to gravity" or "if I go out in the rain, I will get wet". 

 

How are you going to enforce the "non violent consequences"? If they say they are going out anyway, what are you going to do?

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It's hard to wrap my mind around this. Do any of you have direct experience with this working on its own, or do you have to back it up with non-violent consequences like not being allowed to go out with friends or watch tv until the chore is complete?

 

Those arent really consequences though, are they? They are punishments, or coercive ways of enforcing your will. Consequences are "if I jump off a building, I will fall due to gravity" or "if I go out in the rain, I will get wet". 

 

How are you going to enforce the "non violent consequences"? If they say they are going out anyway, what are you going to do?

 

I think that real peaceful parenting avoids punishing children. Their actions will have natural consequences for them, and there really is no reason to double-ding them. I don't clean my place because I want to avoid being yelled at or I want to receive a bribe (reward), I do it because I genuinely believe that having a clean place is a good thing and I want to give that to myself.

 

That said, if a parent can punish the child, then the child should be able to offer similar punishments to the parents. But most parents won't offer that two way street.

 

Fundamentally, all punishment is about the infliction of negative feelings onto the child (being grounded induces boredom, being hit induces fear and pain, etc). The infliction of negative feelings is not an act of love, nor is it an expression of unconditional love, which children deserve from their parents. If children can be punished, if negative emotions can be inflicted upon them, then that means that love can also be withdrawn and withheld from them, and love is a legitimate psychological need for children, it is like withholding food. Children who do not get what they need grow up distorted, whether that be physically through malnutrition or emotionally through lack of love.

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Allowance is to teach money skills.

Delayed gratification is an important trainable skill which creates very successful adults.

Quantity sufficient for the child to buy something very small, but sufficient for them to save up enough for something relatively significant in a time frame the child can handle.

6 yr old, chips $1, toy $5. replace lost money

10 yr old, ice cream $3, game $20 console with a special treat

14 yr old, arcade $5, sneakers $65 say aw, I'm sorry

This isn't for anything, and it isn't even removed for bad behavior, this is an investment so your child can plan and manage money.

A child should have basic chores, minimal, connected with improving his or her independence, train them to fold towels, then tshirts, sew buttons, upgrade it as they grow. By 16, they should be able to do everything they need to survive, including cook for themselves simple foods rice, pasta, burgers, salad, scrambled eggs. Don't leave them dependent on you for anything. Of course make dinner for the family, care for them, love them help them with everything, but help them learn too.

Large heavy labor type tasks, sweating in the backyard in the summer for an hour, pay them. If they sweat, reward them. Or they won't like to work hard.

Wealthy people follow all of this, except for teaching their kids how to sew cook, clean etc, but mostly because they may not know how to themselves.

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