The allowance debate: Con

“Teaching a child to be a contributing member of the family is more valuable at a young age than offering lessons on financial planning” — Jon Willing

Miles Willing helps with a post-dinner cleanup. Photo Credit Jon Willing

I have developed a contractual relationship with my five-year-old son.

The terms of our first contract executed in the winter traded time playing Mario Kart with some classic daily tasks, like cleaning up toys. No money changed hands. The contract, which Miles decorated with Super Mario stickers after authorizing it with his “signature,” carried no cash allowance for services rendered.

So I wondered, why bother paying a child an allowance at all when money doesn’t resonate at such a young age?

He’s still getting a reward in that chore-for-activity contract, you might argue. What’s the difference between paying him 10 bucks or allowing him 10 minutes of playing a game?

Every family and every kid is different, but in my limited experience, a transactional relationship between kindergartner and parent requires no cash changing hands. Money doesn’t matter. For the child, everything required for day-to-day living is provided. What more could there possibly be?

For many kids, the answer would probably be more screen time.

To be fair, this isn’t a full-throated slam of allowances. I see the benefits of giving agency to children for small budgeting decisions in their own lives. I like the idea of children weighing spending their money now versus saving it for something bigger.

Still, the most common argument against allowances has merit. Contributing to the day-to-day operations of a household shouldn’t be a salaried job for anyone living under the roof. Teaching a child to be a contributing member of the family is more valuable at a young age than offering lessons on financial planning.

Besides, kids are maddingly smart and quick to figure out loopholes. They’re not sulking if household chores don’t get done. They know parents will do the work. Kids don’t need to work and a salary to survive. The urgency isn’t there. FOMO rules, and so, the opportunity cost of doing chores isn’t the loss of revenue—it’s the loss of time playing street hockey, video games, whatever.

I question if children can really value money when paying for stuff is often an invisible transaction. 

E-commerce has exploded through the pandemic, but even before COVID-19 transformed the economy, spenders were relying less on cash for payments. The Bank of Canada, which says it researches Canadians’ payment methods every four years, reported in 2019 that people used cash in one out of three transactions.

I’m reminded of how altered the concept of “money” has become for kids each time I whip out a payment card at a retail store, restaurant or transit fare gate.

You might ask, but how are children going to learn the value of money if they can’t practise using money?

Don’t worry. Your child will soon learn the value of a dollar because in Ontario, they’re legally employable at 14 years old, and even younger if they’re working as a model, comedian or circus performer.

For now, I’ll be drafting a couple more contracts for Miles, trading chores for regulated activities like screen time. The spring melt is coming and we’ll need help cleaning the deck.