Kids earning or learning?
I don't want allowances to be a handout. I want to teach my children the value of work while also teaching the value of saving versus spending. Hopefully I can instill in my children a good attitude towards money, something that both my wife and I didn't get in our own childhoods.
I give my kids an allowance, based on their participation in household chores. The chores are leveled in difficulty for the age of the child: I don't require my 5-year-old to perform the same chores my 11-year-old does. But each chore is tied to a dollar amount -- since the 11-year-old can do more, he gets paid more than my 5-year-old. No chores, no allowance. If they want a raise that week, they can work more and get more money (get "overtime pay").
Where this plan falls down is in two places, one of them self-inflicted:
1) We end up buying stuff for them. Most times they forget their allowance money when we go to the mall, so my wife and I end up paying for their items with the hope that they'll pay us back afterwards. This becomes "please buy this for me" and I'll admit that we are weak-kneed in this area.
My oldest son (the 11-year-old) is a real skinflint with his money and a wastrel with ours. When we challenge him with "use your own money for that" he almost invariably puts the trinket back. He'll quite happily spend our money, but is a real tightwad with his own cash.
2) They get lunch money and snack money. My 11-year-old has a school lunch for $2 and an additional snack for $1. He can keep the snack money if he doesn't spend it. I'm certainly not advocating making my kids pay for their own school lunches, but this extra $5 per week cancels out his need to earn extra cash through chores. If he doesn't need more than $5 per week (see above) he isn't motivated for work.
I guess what I'd like to know is how others feel about allowances for their kids, and whether the allowance is based on work or given as a handout?