Allowance vs Commissions….it doesn’t matter at our house, because either way you look at it, the money comes from the family budget. When your budget is super tight, that’s not an option.
Just so we’re talking about the same things:
- Allowance is money kids get for living. They are usually paid by the week or the month and use that to practice money management. Kids with allowances are usually expected to pay for their own entertainment, school lunches and sometimes clothing too.
- Commission is an allowance tied to performance. Kids earn their commissions by doing all their chores and having good behavior. It’s usually a set amount similar to an allowance, but they might not get it all if their performance isn’t up to par.
My kids get neither. We pay one child $1 a week for trash and another $3 to mow our yard. Occasionally I offer a quarter here and there to do some of the harder chores that are above and beyond their normal job description. Split that however you like between 6 kids and they don’t have enough money to learn how to manage it well. If they drop a quarter in the plate at church, it took a lot of work to earn that.
If I have a job that I would have hired an adult to do (because I had the budget for it) and one of my children could do that job, I offer it do them. I treat it like a job interview and if they act lazy or less than thrilled I don’t hire them and offer it to someone else. Those types of jobs don’t come up a lot, so our kids have remained relatively broke (though are usually enthusiastic about an opportunity.)
I want my kids to know how to handle money. To know how, they have to practice. In order to practice, they actually need money. It either has to come from me, or someone else.
3. We aren’t into begging people to pay our kids for things they wouldn’t normally pay for, so we taught them marketable skills and sent them out to the real world to bring in money apart from our family budget. So far it is working. Its harder on us while none of them are drivers, because we have to taxi them to their work. The hassle is worth it.
Next week I’m going to interview each one and let them tell you about their businesses (or future plans for one) and all the details. It’s going to be fun, because you never know what kids are going to say.
Do your kids get an allowance or commission? How do you teach them money management?
This is day 3 of our series: 31 days of Kids and Money
Little entrepreneurs!!! How awesome!
That is awesome, I definitely hear you on not enough money to create allowance for all the crew. I love that you interview them for jobs that you would pay someone else!
We call what we do commission. Our kids have chores and each chore is worth a certain amount of “jewels” (glass stones). They each have a jar and when the jar is full they get $10. We figured out if they just do all their chores and do them correctly without being reminded they would earn $10/month. If thy have to be reminded more than once they don’t get their jewels. And extra chores are worth more and a few things like cleaning out the 15 passenger van are “jackpots” (10 jewels). There are a few other rules but we love that this puts each child in charge of their own earnings, if they work hard they make money, just like the real world. We also love that any child that comes I to our home (we are a foster family) can be easily integrated into the system, and the kids can start as young as 3 earning their own money.
Shawna, this sounds like a fun an doable system. Thanks for sharing it!