Here’s My Problem: My Kids Get The Smallest Allowance In School

by Ron Haynes

I recently received this email on kid’s allowances from a reader named Paula:

Hey Ron, I love your blog! Thanks so much for what you write. I get alot out of it every day. I wanted to get your advice on my biggest daily problem–my kids allowance. I give each of my 2 kids $5 every two weeks when my husband gets paid. The problem is that my kids claim their friends get anywhere from $10 a week to $25 a week. They feel they are “underpaid,” and I’m not sure how to respond. The “if all your friends jumped off a bridge” line of reasoning isn’t working anymore. My kids are 10 and 12 years old btw. Any ideas? Thanks!

Thanks for writing Paula, disparity in allowances is a common and sometimes difficult problem to handle. Our kids are great negotiators aren’t they? I don’t know about you, but I think my 8 year old son, in less than an hour, could have negotiated peace between The US and Japan back during World War II.

Other parents who set no limits on their children do sometimes cause problems for those of us living within a budget and who are teaching our kids to budget their allowance. Those other children show up at the mall with credit cards or wads of cash while your children (and mine) have a limited amount of cash only or at least a budget on what they can spend. When we went to watch The University of Alabama Crimson Tide whip the Hogs of Arkansas on the football field (49-14), I gave each of my three children $10 in ones. I told them they could spend their $10 on whatever they wanted, food, sodas, souvenirs, or whatever, but that when it was gone, it was gone. Don’t come to me asking for more money. They learned the economic principle of “scarcity of resources” pretty fast! An no, we didn’t cave in when they asked for more.

Your solution will involve a sequence of steps:

  1. Gather the real facts. Are you getting the whole story on the amounts your children’s friends receive? Sometimes kids will exaggerate their claims for competitive reasons. Make a few phone calls to other parents and just ask.
  2. Consider re-evaluating your budget if you feel you are being cheap. You know if you’re being cheap.
  3. Make your kids part of your evaluation and reevaluation of their allowance amount. Why do they need more money?
  4. If you still feel that you are doing exactly as you should after gathering the facts and reevaluating, stand firm and do not cave to the pressure!
  5. You could always encourage your children to learn ways to make extra money!

Unless you’re the richest man or woman on earth, there will always be someone else with more money and/or with less discipline. This is an opportunity to help your children become wise in the ways they view their financial position at a particular moment in time. Jealousy and covetousness are not traits you want them to cultivate. What you want them to cultivate is a spirit of contentment within their own little selves.

Caving in to the pressure of what others do or have is NOT a money problem. It is a values and discipline problem.

You and your husband will have a different set of values from your children’s friend’s parents and those values will be reflected in the way you spend money. Just because someone else has different values, doesn’t make yours wrong or theirs right. That is precisely why it is vitally important that you remain firm in your decisions. Spending just because another person does it is never wise.

Working through this problem will be a wonderful teaching opportunity for you and your children. Don’t overlook the opportunity by caving in to their pressure.

[tags]allowance, kids, children, budget, negotiations, money, negotiate, parenting[/tags]

About the author

Ron Haynes has written 988 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.