A couple of weeks ago, my 9-year-old daughter was surfing the Internet, and I casually asked her what she was looking for.
Danielle Hoston: She said, "I'm looking for a job for me and a husband for you." I know ... She's quite the comedian. Anyway, without giving that whole "husband" comment much energy, I asked her a little bit more about why she wanted to find a job. It turns out that her reasons were valid: 1) She wanted to know what jobs she was qualified to do, and 2) She wanted to have her own money.
When I was a child, I too wanted to have my own money, but I never received an allowance. I had homework and chores, and either my father paid for things or he didn't. My first job (and first paycheck) was doing small administrative duties at my dad's office. There was simply no such thing as an allowance in our household. It wasn't until I was an adult that I appreciated my father's subconscious message: Money is earned.
I wanted to send the same message to my daughter, but I also wanted to give her an opportunity to actually earn money, so we established some rules:
1. We would not use the term "allowance," we would use the terms "earnings." Money isn't magically "allowed" in the real world ... at least not for most of us, anyway. Most of us actually earn our money.
2. There won't be pay for chores that she SHOULD do. Taking out the trash, loading the dishwasher, and cleaning up behind herself, etc., are "chores" that we all do in the regular course of being a responsible human being, not things we get paid for.
3. There won't be pay for grades. She is SUPPOSED to get good grades. The payoff for performing well in school is the pride she feels in a job well done and becoming a little smarter at the end of the day.
4. She will be paid based upon the estimated time it takes her to complete her "job." We looked up minimum wage (currently $8/hour in California) and determined that as our starting point.
Today, she organized my bathing suits and earned $4. I have a lot of bathing suits, and she's a pretty good organizer, so it was a good deal for both of us. Now, she's thinking about starting a business of breeding hamsters and selling them at school. She told me she already has a few customers lined up. Don't worry ... I think I talked her out of it, but I'm proud to say that I think she may have caught her mother's entrepreneurial spirit and she greatly appreciates the money she's earned. Maybe by the time she's 10, we'll talk a little more about how payroll taxes can affect your net pay, and the overhead costs of running a business. I might even require a mandatory savings account or a 401k for larger jobs she completes. You can never start too early, you know.
Do you believe in "allowances"? Why or why not? What principles do you believe children should learn about the value of earning a dollar?
|Danielle Hoston is a business and finance expert with Hoston and Associates. She is the mom of one and resides in Los Angeles.|