Commission vrs Allowance

This post is in response to a comment left here yesterday. Thanks for your question.

In years past, prior to me leading Financial Peace, my wife and I would pay our two kids a weekly allowance so our kids would have some of their own spending money. When kids are young the typical allowance is usually $1 for each year old your child is.

As our two kids started getting a little older, I began disliking the feeling I had each time I handed them their allowance money. I sensed an entitlement attitude coming from them and I wanted to teach them that money doesn't grow on trees. (Well technically the paper money is printed on comes from trees)

Fast forward to Financial Peace. In on of the classes, Dave Ramsey spends some time talking about parents teaching children how to handle money. During that time, the light bulb went on for me. Dave says that each member of the family must contribute to the household and that children should have some assigned work to do. Dave then paid his kids a "commission" for work done. No work, no money. (Just like in the real world.)

My wife and I adopted this method at our house and it has worked out wonderfully. Although my 13 year old doesn't like the name Dave Ramsey. There's no more asking for money from our kids when we are at a store. No on the rare occasion when our kids ask for money from Mon and Dad, we'd respond, how much commission do you have left? The kids usually respond "none". Then we say sorry, you'll have to save some next time. The typical question these days from our kids is,"What can I do around the house to earn $XX".

Here's how our commission process works. I post a chore list on our refrigerator each week. Our kids have 7 days to complete the items on the list. at 9 pm on the 7th day, I pay them the commission base on what has been completed and take away $2 for every item that hasn't been completed. And if there are three things on the list not completed, they are grounded for the weekend. Our kids can also earn bonus bucks for bringing home graded papers from school with A's on them. (Limit of 3 A's per week for bonus bucks. The A's week really adding up.)

If our kids complete all their chores, there weekly commission is $12. Then $1 for church, $1 into savings and they get to spend $10. They also get one additional dollar for each A that week up to 3 A's. (My 13 year old son is pushing for a larger commission. I'll need to revisit that soon.)

Anyway sorry for the long post but it was worth reading. If you go to commission route, please let me know how it goes. It's been a great learning process for our kids and has taken away the guild of Mom and me. No more asking for money from our kids and us telling them no.