While whether kids should receive an allowance at all is a debate in itself, parents who are pro-allowance typically fall between two sides of the spectrum. Some believe allowance should be earned by doing chores and others say it should just be given and it is up to the child to manage his own money. There is even debate on whether kids should receive money electronically or as cold hard cash.
Gregg Murset, founder of BusyKid.com, is a proponent of the idea you have to do something in order to earn your money. “You need to challenge them by providing different opportunities for them to make money, and challenge them with these concepts we’ve been talking about: saving, sharing, and spending,” Murset says.
Murset’s app BusyKid allows parents to assign chores to their kids, and the kids can see how close they are to “payday” and decide how to budget their money. “It doesn’t make sense to give kids $20 at the end of the week when they just sit around and watch Netflix,” Murset says. “We need to teach kids what we do every day: We work, earn some money, save some, share some with charity or people we care about, and then spend the rest.”
Rather than using cash, Murset says kids should learn how to use debit cards or phones to pay because most forms of payment have shifted over to technology. “One thing that drives me nuts is when people say, ‘Kids don’t know how to balance a checkbook these days.’ Well, no one really uses checkbooks anymore,” Murset says. “We have to change our mindset and teach kids in a way that makes sense.”
Roy Paul, executive director of Cents Ability, agrees that kids should earn money through work, but should receive cash to be able to see their money in their hands. “We really want young people to turn into responsible adults to understand the concept of hard work and what they should get in return because those trickle down into fundamental beliefs about the workplace and to work hard for money,” Paul says.
However, Jean Chatzky, financial editor of the NBC’s Today Show, has a viewpoint that is more in the middle of these two ideologies and favors giving kids cash. She believes kids should not be paid for doing chores because she says they are tasks that should just get done without a monetary incentive. Instead, kids should be given money to buy things that parents no longer want to pay for, which will teach kids how to save and budget within reason. “You shouldn’t give them so much that they can buy as much as they want,” Chatzky says.
As with all things when it comes to raising kids, ultimately it is up to you whether your child receives allowance, for what, and how. Where do you stand on this debate?
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