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M is for Money Management (And Resisting Indulgence)

Posted on September 16, 2011 by admin Leave a comment

By Laura Kastner, Ph.D.

Call it “entitle-mania” (we did in Getting to Calm and a past ParentMap article), or indulgence, or just plain spoiling, but many families do it and wish they didn’t. The U.S. financial sector is not the only economic system that needs fixing. Most families admit to lacking optimal policies for teaching their kids the value of a dollar. They also acknowledge that spoiled kids are a big pet peeve. The trap is easy to identify—kids are easier to deal with when you give them the stuff they want and a break on chores.

One parent I see in my practice put it this way, “I know I should “just say no, but I hardly even see my son because of his busy high school schedule. Plus, he’s always so grumpy and annoyed with me. When I buy him what he wants or do his chores for him, he turns all sweet and affectionate. I can’t help myself—I give in all the time.”

As parents, it is our responsibility to prepare children for the adult world in which they will need to live within a budget and do a lot of drudgery and household chores. Therefore, we need to incorporate these experiences into a child’s life from early on. Even two year olds can put their toys away and pour kibble into the pet’s bowl. By adolescence, they should be helping with just about every household task at some point. Yes–even if they are studying for SAT’S, taking AP’s and keeping up their GPAs.


Typically, parents will tell their kids the rational reasons for chores. They might say something, like “You are part of a community from which you receive many resources, and therefore you need to contribute”. The crazy thing is that many parents actually think that this explanation will result in agreeable compliance from their children! However, a more common response is dragging of the feet, objections and outcries of injustice. And if this kind of protest gets your kids out of their chores, then the infectious disease called “indulgence” has sneaked into your home.

The raw truth of the matter is that children are born hedonists. The pleasure principle rules: “I want what I want when I want it.” It’s up to parents to impose a system whereby they learn to delay gratification and cope with the frustration they feel when they are doing yard work instead of social networking. In fact, one of the best systems for getting compliance is to establish a system whereby they get access to their fun stuff only after they finish their chores to your satisfaction. First they do what you want (e.g. chores), and then they get to do what they want (e.g. access to screens). Let behavioral theory be your parenting friend.

Teens Research Unlimited reported that the median amount of allowance per week among 12-18-year-olds was $50, but the teens from homes with household incomes above $100,000 were given $175 per week. Some did some chores for money, but a large proportion of pocket money for children is in the form of handouts.

There have been decades of debate about whether to connect allowance with chore completion or to give allowance as a separate policy. Personally, I have come to believe either way can work as long as the parents are consistent. The essential goal is that parents have successful policies in place whereby kids do regular chores and live within a conservative budget. If parents accomplish this noble goal, they are way ahead of the national average.

Allow me to repeat myself: the goal is that children learn to be responsible about doing household duties and saving money for a portion of their purchases, not that they are happy and agreeable about it. Financial policies and chores put a big crimp in kids’ pleasure principle. However, young adults reared with these policies are grateful to their parents, even though as children these onerous responsibilities were likely to be the bane of their existence. They end up glad they didn’t become the spoiled brats that some of their indulged peers turned into.

Imposing policies around money and chore management is one of the classic parental dilemmas: “Pay now or pay later.” If you enforce rules regarding daily chores and budgets, you’ll encounter negative moods, resentment and conflicts, but you’ll raise a teen with values and character that you (and your teen) are proud of.

Cave to their desires and their protests, and you’ll avoid nasty exchanges and often get a smile, but you’ll kick yourself for the indulged young person that you helped to create. Furthermore, kids with a case of the “gimmies” are not happy kids. The earlier mentioned infectious disease called indulgence makes them smile initially, whine with dissatisfaction fairly soon and tantrum for a new fix shortly after that.

I worked with a family once—let’s call them the Smiths—that needed and wanted a grand overhaul. The tweens, 9 and 11 year old boys, lacked chores, self-discipline and budgets. The parents were disgusted with themselves as they described how their kids did not “lift a finger to help, threw tantrums to get what they wanted and expected to be waited on, hand and foot”. They admitted that they didn’t even like their kids much of the time, even though they loved them deeply, which was part of the “problem”—it was hard to deny them their wishes.

The good part of this story is how serious the parents were about committing themselves to change. It took over a year, but here is the system they implemented.

1. Daily chores are completed in order to earn screen time (e.g. a list is posted that includes garbage, dinner, and room duties). If the chore is not completed by X time, no privilege.

2. Weekend chores are completed before social outings are allowed (e.g. yard work and special projects related to helping parents, around 1-2 hours).

3. Parents review policy, monitor it daily, withhold privileges and re-negotiate it as needed.

4. Parents keep a ledger sheet to keep track of allowances, 10% of which goes to a charity of each child’s choice and 20% of which goes to a savings account. That leaves 70% which is the child’s “spending money”, payable upon request of the child.

5. Parents update agreements with children regarding the allowance amount as the child matures, stipulating what parents pay for (e.g. shoes, athletic equipment, etc.) versus what the child’s spending money is designated for (e.g. music, movies, food outside the home, etc.).

6. Children use their spending money as they please. Purchases using money from savings account require parental approval.

7. Sizable financial gifts from family members go into savings accounts. Family members give moderate “spending money” gifts directly to children, still with parent consent.

(The parental controls with relatives are in place to protect parental values regarding saving for large purchases, securing a budgeting process and the teaching of delayed gratification).

The initial implementation of the system was, of course, a mess. The kids threw giant tirades about the new policies in a dynamic known as “extinction surge” among psychologists. If parents stop delivering goodies, then kids will intensify the protests. (When experimenters stop dispensing pellets to pigeons that have received them for pecking a bar, the pigeons start pecking the bar like crazy). This “surge” of attempts to get the parents to weaken their resolve should be expected and endured. Consistency pays off. The kids will cease their protests when they figure out exactly how they can and cannot receive their rewards.

Behavior management and financial policies sound great in theory. But between mapping the plan and successful implementation lies the treacherous realm of emotions. It took a year for the Smiths to get their system in good working order because we had to iron out mom’s sensitivity to kids’ outbursts, dad’s conflict avoidance and the marital disagreements about “how much is too much”. Money management is one of spouses’ greatest sources of conflict. So is parenting. So is misbehaving children. No wonder it is a mine field. But don’t put it off. Pay now or pay later.

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