Are You Doing Allowance All Wrong?

The following post is adapted from YNAB Podcast, episode 216.

I recently had the opportunity to interview Ron Lieber, a New York Times columnist and author of The Opposite of Spoiled. If you are anything like me, and mildly freaked out about spoiling your six kids, you are going to love this. I learned a lot (he basically solved the whole allowance quandary for me! Thank you, Ron!), and I think you will, too. Here are some highlights:

The Opposite of Spoiled

RL: The book is a guide to how, when and why to talk about money with your children. And how to connect those conversations about money to all of the values and virtues and character traits that you want to imprint on your kids before you kick them out at the age of 18.‍

JM: Yes, and you do kick them out, right? I think that's my plan at the moment. So what exactly is the opposite of spoiled? What do we call that?

‍RL: The opposite of spoiled is the constellation of values and virtues and character traits that we want to imprint on our kids by the time we are rid of them. It's modesty and prudence and thrift. It's patience, certainly, and delayed gratification. It's generosity, absolutely, graciousness, gratitude. Perseverance and grit, for sure, and perspective on your place in the world. And, curiosity about how you and your family got there.It's okay to ask questions about money. Family history is important. You want to learn how your parents made their career choices and how they impacted their financial standing. This is all good. We don't want to be defensive about their money questions because it turns out that, in the course of answering them, we can have discussions in our families that last for years, that will lead to each and every one of those values and virtues and character traits that add up to the opposite of spoiled.

‍JM: Yes, so the money is contributing to the teaching of those values, the instilling of those values. The money is actually a tool in learning that instead of ending up, yes, causing the spoiledness in the first place.

‍RL: I would go even farther and say that it's essential to teach those values because money is important, and teaching our kids how to handle it well—and be smart about it—is a central role in parenting.

Chores And Allowance Don't Mix

JM: We get a lot of questions about how to handle allowance, and I never have a good answer. And, so I'm curious to hear what you found as you were researching and writing the book as it relates to allowance.

‍RL: Allowance is not a wage that you receive in exchange for a task accomplished. It's not something that you use to pay kids for chores. To my mind, the two things are separate. Chores are things that we do around the house because we love one another because we want our homes to be well functioning, and so we perform those tasks as a duty and as an act of joy and an act of love and commitment to the people that we live with.The money that you get in the form of allowance, that's a tool for learning. Money in that context is for practice and we want kids to practice with money, the same way we want them to practice their musical instruments or practice with their art supplies or practice with their athletic equipment. We want them to get good at money, the same way we want them to get good at all of those other things. So yanking the money if they don't do their chores doesn't make a whole lot of sense to me, in the same way that I don't think we can yank their books or their art supplies or their violins if they don't get their chores done.

‍JM: Yes! If we were to say, "Okay, if you don't practice I'm going to take away the piano," my boy would be like, "Perfect! My dream come true!" We just threw it down this morning over the piano, so this makes so much sense to me.

‍RL: Right. If you're looking for leverage, if you want to make sure that the chores are getting done well, without having to nag, the best thing you can do is take away privileges or take away the thing that they like to do as opposed to the thing that they like to get.If you are still tempted to pay for chores, I also think it's important to remember, that you're setting yourself up for a really tough negotiating situation down the road, because eventually, they're going to get wise to the system and just opt out of the allowance and the chores.

‍JM: Yes, good point! And then you've got to unwind all that and say, "Oh no, wait, wait!" Okay, I like that.And honestly, on some level, we were already dealing with some complications. We just had our sixth kid, so we've got a lot of kids, like a whole business there at the house, and it was adding a lot of overhead for Julie, my wife, trying to gauge how well the chores were done, and what they were worth. And it was unfair to the kids because it was like, "What? Did I catch mom at a good time or a bad time? Is she feeling generous or stingy?" They were getting inconsistent results and it was stressful for Julie because there was a lot of whining and negotiating.I like drawing that line, where we can separate and say, "You get an allowance so we can teach you how to use money. You do chores because you're a part of the family and there's a lot to learn from that hard work."

Speaking of Hard Work …

JM: So you said you were out in Utah, where I am, and you spent time with these dairy farmer families?

‍RL: I had many hypotheses when I started the reporting for The Opposite of Spoiled, and one of the ideas I wanted to test was this idea that kids were capable of a lot more in the way of contributions and in the way of chores than we generally give them credit for.What I knew about farm families—or my hunch about them—was that the farms are quite often run by the kids or at least run in part. I ended up at the Smith family farm in northern Utah and there are nine boys in the Smith family—the youngest is Jebediah Smith. And I went to meet him because at the age of five in the Smith family you're promoted to tractor driver.He literally gets up on that thing and he drives it and his brothers all trail behind him, feeding the baby cows. And you know, he's also got a gun—you get your first gun at the age of five in the Smith family—and he uses that gun to chase the birds away.So I thought if Jebediah Smith at age five can be a tractor driver and a gun shooter and a bird chaser, can't five-year-olds in suburban and urban homes, and a lot of ten-year-olds and fifteen-year-olds, contribute a whole heck of a lot more to their families? And I thought yes, in fact, they can.The moral of the story for me was to expect more of your kids. 

Talking About Money

JM: One of your recent columns in The Times, you mentioned surveying parents about their hesitance to share income or their own money details with their kids. I have kind of waffled back and forth with that myself—can you share a little bit of what you found?

‍RL: I think the best approach is to say the following to them: "That's a great question. I—or we, if there are two parents—would like to tell you the answer before you go away to college or go and do whatever you're going to do away from home, but right now you're not ready to handle that information.You don't have the math skills yet and you certainly don't have the context. You don't understand what it takes for us to provide whatever kind of life we're able to provide. So we're going to teach you and you're going to practice with the save jar and the spend jar and the give jar so you know what it means to save money and spend it and give it away. And when you are 16 or 17 or 18, you'll be ready. But right now, chances are, you're probably not."

‍JM: Yes, so you're upfront with them, you tell them exactly why you're not making it this taboo subject, but you're shooting really straight with them and kind of giving them a roadmap on how they'll grow and how they'll be ready to navigate that stuff.

‍RL: And you're also making it clear that you actually believe that they're entitled to that information and it's good that they're asking, that you value their curiosity, you want to honor it, but there's some learning that has to take place before they can have that information. And you know, they may not like that answer, but at least it's a true and reasonable explanation that's not based in emotion.