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If you’ve been following the money conversation so far, you’re probably wondering, “How does allowance fit in to all this?”

Personally, I choose not to use an allowance, but I don’t believe that allowance is necessarily a bad thing, depending on HOW YOU FRAME IT.

What I do is prioritize helping my daughter earn money in lots of different ways, and let her know that I’m available to support her to earn money for whatever purchases are important to her. I remind her in good time before something is coming up that she might need spending money for, and make sure I put aside time to spend helping her figure out how she’d like to earn that money. I also offer her opportunities to earn money. For example, I was hired by a school to interview potential new families to the school, and she came along to greet the families at the door, show them where to hang their coats, and introduce each family to me and to the teacher who would be working with the child. I then paid her a percentage of my earnings for that day.

Here are some things to consider when deciding whether and how to use an allowance:

To teach a child that every family member is responsible for caring for the home and family, I generally recommend avoiding connecting household chores with allowance, especially if you are going to dock money for chores not done. It becomes too easy for the child to make a negative connection…”Oh! Well, I don’t need the $5, so I’ll just take the week off of my chores.” Instead, help the child to understand that household chores are what we ALL do to make family life work.

HOW you talk about the way you share money with your children is extremely important, and leads them to establish beliefs around money and the relative value of other things, products, services, generosity, etc. For example, if you give your child an allowance of $20 every week, with no explanation, they will absorb something different than if you give your child $20 each week and say, “In this family, we all share the fruits of our labours. This week, I earned money at work, and I am sharing it with you. You and I worked together to clear ice off of our sidewalk, you cared for our dog, and dad cooked dinner tonight. We all benefit from all of our work for our family.”

On the other hand, if you give your child an allowance of $20, after asking, “Were you good this week? Did you do your homework? Did you listen to your teacher?” your child will absorb the idea that money is a reward for somebody else’s definition of “good” behaviour. Remember that when a person sees something as a reward, the intrinsic interest in the activity needed to earn the reward DEcreases, and the desire for the reward INcreases. So, if you are using money as a reward for “good” behaviour, your child will become LESS motivated to produce the “good” behaviour independently, and more interested in the money.

This, of course, brings up the question of whether money is a “reward” for work when we are adults. Remember that our beliefs make a big difference here – the meaning we give to the exchange matters a lot. If we see money as a reward for drudgery, bestowed upon us by a judging external “boss” or “The Man”, our relationship with both work and money will be affected. If we see the results of our work as valuable to the world, and the money we earn as equally valuable, we are comfortable with the exchange, and we maintain our intrinsic motivation.

So, as I mentioned in the first part of this series, YOUR beliefs about money matter a lot, and will be passed on to your children, unless you are intentional about sharing something different, AND changing the beliefs you don’t feel serve you. Hint: To figure out if you have any unhelpful underlying beliefs about money or work hidden in your psyche, start journalling with sentence starters, “Work is….” and “Money is…” Repeat the sentence starters over and over, and write stream of consciousness until you’re empty of associations.

The bottom line about allowance is, AFTER you’ve clarified the beliefs you want to share with your children around money, IF you choose to give an allowance, decide HOW you’re going to frame the allowance so that your child is receiving the healthy messages you intended to share. One example of framing the allowance in an intentional way is above, in the quotation beginning with, “In this family we all share the fruits of our labours.”

There are lots of healthy, creative ways to support your children to become responsible with money, but the underlying beliefs are always key. Make sure that the messages you are sending your children are clear, and NOT wrapped up in the muddy waters of rewards, punishments, praise, shame, or fear. This way, your child can start off his or her lifelong relationship with work and money feeling confident and positive.

Please share how you support your children to understand money! We’d also love to hear any questions that you have.