“For whom the Lord loves He reproves, even as a father corrects the son in whom he delights” (Proverbs 3:12). Normally, during the first 10 years the basic attitudes of children are being formed.

Unfortunately however, it appears that discipline in spending is one attitude that has proved to be lacking.

A recent survey reports that although teens spend more than $80 billion a year, of which the majority has been funded by parental allowances, fewer than half know the basics about credit, checking, savings accounts, or auto insurance.

There is no such thing in God’s economy as an allowance.

The word allowance is a misnomer, because it means something that is given to someone and was not earned.

Although it is important that children receive money of their own—either through allowances or payment for jobs completed, so that they can begin to learn how to handle money wisely—parents need to be careful that they do not train their children to expect allowances, rather than to work for what they need.

Rather than giving their children an allowance without any accountability, parents really need to teach their children financial responsibility with any money they receive.

Establishing an allowance
Setting up a successful allowance means talking with your children about what the allowance will cover, how they can spend it, consequences of overspending, how much should be saved, and how much should be given to the Lord’s work.

A weekly income helps children learn money management, responsibility, values, goal setting, and planning. They also experience the consequences of making financial mistakes.

Parents, in turn, are freed from the chore of being their children’s bank tellers, and they’ll find it easier to track how much money their children spend.

In order to ensure balance, parents need to be careful about setting allowance amounts. Children’s allowances should be enough to look forward to, enough to enable parents to begin teaching them God’s financial principles but not enough that all their wants and desires are met and they have no need for extra jobs.

Ultimately parents need to wean their children off allowances and onto their own earned income.

Therefore parents need to make sure that children’s allowance raises do not keep pace, percentage wise, with their budgets. Their allowance should become an ever-decreasing portion of their budget.

Allowance guidelines
Allowance amounts depend on several factors: age, maturity level, interests, responsibilities, and the family’s financial situation. Give enough to encourage giving to the Lord and saving, but don’t give too much.

At the beginning of each school year, sit down with children to discuss the allowance. Decide what things the allowance will cover.

Let children make decisions and mistakes with their allowance. Monitor spending and don’t give them more money when they overspend.

Put the allowance agreement and guidelines in writing, including the amount, what day it is given, what it covers, and any restrictions.

To keep up with children’s changing needs and current costs, review and adjust the allowance agreement regularly.

Be consistent: set a specific time and day to give the allowance and stick to it.

Don’t link allowance to routine household chores. Children have chores because they’re members of the family; they get an allowance to learn how to handle money. Linking the two may result in children who won’t do anything without pay or children who decide the money isn’t worth the work.

Don’t link allowances to behavior; it confuses the issue and can become a source of conflict and manipulation. Don’t use an allowance to punish.

Don’t use allowance as a bribe for good behavior. It’s okay to reward children for courage or especially good behavior, if the reward is given after the fact.

Be a good role model. Parents should teach their children that God owns everything by allowing them to see this principle at work in their lives, that the first portion of their allowance belongs to God, that they need to live on a budget, and that they need to exercise self-control and discipline in their spending.

Extra money
All children need some basic responsibilities for which they are not paid. Children make their beds because they sleep in them. Children help with dishes because they eat food and dirty the dishes. Children put dirty clothes in the laundry because they wear them, dirty them, and need them clean again.

As children get older, if they complete tasks over and above their regular chores—gardening, washing the car, cleaning the basement—it’s fine to pay extra for the extra work. If children say that they really need something, provide opportunities for them to earn the money, do not just give it to them.

However, the parent must be fair and pay the children equitably, according to what the parents are able to afford.

Before they get paid the parent should make sure that the children have done quality work, they have finished the jobs, and the parent knows and has approved how the money will be spent.

Conclusion
Each parent and child takes on certain responsibilities and also gains certain benefits from being a family member, much like the relationship of each believer in God’s family.

We each have certain responsibilities that must be carried out if the family is to work together, children included. Each family member receives benefits that come from working together and benefits from simply being a member of the family (such as an allowance).

By teaching that each family works and lives together for mutual growth and benefit, and putting allowances in that light, parents and children alike can establish the right attitudes and principles. The key is to give children their allowances and require them to do their household chores without tying the two together like a work-for-hire agreement.

We have responsibilities toward God in working for His good, but we also receive many blessings simply for being His children. We must use God as the best example of parenthood to our children because He balances gifts and rewards perfectly.