When You Can't Afford Child's Allowance

Explain it to her ... Cut her back for now and pick it up when things are better. She probably already knows money's tight ...

I once had an acquaintance who's husband owned a Fortune 500 company and had assets and self worth in excess of $500 million and they gave their oldest child $7/week-so she could see a movie and buy a coke. My daughter works with a gal whose dad will earn $23 million/ yr beginning in Jan 2013 (he works for a publicly traded company and this is a matter of public record)-and his child works as a hostess-seeing a little pattern here? I'm not suggesting that an 11 yr old get a job-but she is old enough to understand that her allowance must be eliminated for the time being. Best not to create some sense of entitlement.

I think you are on the right track. Can you reduce her allowance and explain that everyone is making sacrifices right now? I think eleven is old enough to understand. Maybe not to like it, but to understand. And no, don't have grandparents subsidize the allowance. This is an opportunity, as you've pointed out... let her rise to the occasion.

Putting aside the massive amount of birthday money she has stashed LOL

I think there is nothing wrong with explaining to her the realities of self employment and that the next few months will be a little tight. I would not suggest she sell things to make up for the $10 per week. Just teach her to budget what she has to cover the shortfall.

It is a good life lesson - we all have times in life when we are short.

My income dropped 38% in the past two years. (yeah recession!). Anyhoo, I only ever gave my son $20 a month for allowance - and he was 13/14 when that started. When I was unemployed his allowance stopped completely. When I began work again last year, he refused to take the allowance because he knew how financially strapped we were. At 16, this summer, he got a summer intern job and earned about a grand. He bought himself a new gaming system and now offers up the rest to me constantly for groceries, new glasses for me even, wherever he thinks we have a shortfall.

He is a typical teen - but, throughout his life we have always had open conversations about budgets and income for the household. He understands what things cost, what it costs to run the household, and afford small luxuries. He budgets well because of this.

I agree with you, your daughter will not suffer if she does not receive her allowance for awhile. Especially if you have to go into debt to cover it. Borrowing for the electric bill - yes. Borrowing for allowance - no.

It is a reality of the tough economic times that we are in.

First, the $200 in her room is hers. Next, this is a teachable moment. Use it. Explain to here about debt and let her know that the economy is not doing well and you have money for house and food but her allowance will have to be cut until things get better. That doesn't mean she doesn't keep doing her chores, that just means that she is doing what she can to help the family.

Tell your husband that it is ridiculous to take money from his parents so his kid gets her allowance. Ah no. The money goes to the household. Food, shelter and clothing are a must. Anything after that is a want not a need.

I hope things improve. Its rough right now. Keep your chin up!!

I would tell her that while she will not go without the basics, for a time she needs to understand that you cannot afford her weekly allowance and will have to take expenses (like going to movies) on a case by case basis. Tell her that she is welcome to save or spend her birthday money but that she needs to understand that right now business isn't great and everyone needs to pull together.

You don't borrow from people to pay a child's allowance. You borrow when you need to keep the lights on or food on the table. I think your DH is overlooking that she can understand (no matter how happy/unhappy she is about it) that the economy ebbs and flows.

Don't freak her out about worrying about losing the house or something, but be upfront that you are doing x and y and this is why. My mom was so sad that most of the time she couldn't even afford to give me $5 but I understood that there were other priorities.

Whatever amount you decide on, and whatever the scenario or rules for it are.... it is sometimes, not possible.
For us, our kids know and understand, that income or extra money can vary each month. Because we talk to them about it.
So they don't EXPECT, a certain thing or amount, every.single.time.
Nor are they "greedy" about it or about all the many things they may get from relatives. Because, we always, are honest with them, and how everyone and every family, is different, per their situation.
So my kids, have no problem with it.
And sometimes, we can't give them an "allowance" or $ for things they earn. At those times, we explain and they understand. No problem.

My kids are 6 and 9, and they understand.
We explain things to them.

Be honest with her and use this as a learning lesson. Don't take the $200 from her room, even if she offers it to you.

We run our own company from home and our 17 yr old is a partner. She is involved with shadowing me to see how things get paid, etc and if we have a slow month, she sees how we pull into action with our plans that are set in place to make it hurt as little as possible.

There is nothing wrong with being honest and communicating. When you do chat, make sure she is not feeling responsible or that is it a burden on her. Let her know you are talking to her because she is a part of your team.

I always respect parents like yourselves who put so much thought into teaching their children how to manage their allowances.

With that said, we can afford allowances, but I don't hand them out. We buy what they need. Any extra money they receive as gifts go into their savings accounts for college.

I sort of think you are over thinking this. Tell your 11 year daughter the truth. This month is tight. Sorry, all extras are being cut this month including your allowance. We'll pick it back up when we can. Until then, tighten your belt and pack a lunch.

GL!

I would be honest with her and reduce her allowance. However - I would also make sure she knows (assuming it is true) that no one will go hungry and that you are not losing your house, leaving her school system, living in the car or anything horrible like that. Kids can have very dramatic ideas of what having less money means. No reason for her to panic if there truly is no reason to panic.

Well, it sounds like she's a bit spoiled with material things, so I think it would be good for her to learn that money does not grow on trees and that she will need to make this sacrifice for the sake of the family. Your idea of having a garage sale and letting her sell some of her things and keep the money is a good idea.

I also think that she should donate some of those toys to needy children. There is absolutely no reason why one little girl needs eleven American Girl Dolls.

My husband and I are both teachers. We do not get paid during the summer. We save each month so that we have a reserve to use during the summer. Sometimes stuff happens and we do not have enough in that reserve. We have been known to not have enough to pay allowances ane we have even been known to borrow from our kids to cover bills. WE just did that so we could pay for 8th graded graduation fees which were due before our first paycheck kicked in. We tell our son and immediately pay him back. He now gets that we are a family and sometimes this is just how it is. We are not poor, he does not need to worry, but he is learning that sometimes life throws curve balls....that is a very good life lesson I think.

I hope your husband's business picks up soon

Explain to her basically what is going on. And create a "credit memo" for her if you believe that things will work out - you can owe her the allowance.

The garage sale idea is cool - also. And maybe pay her for helping (if she's helpful) if you're able to make enough.

I think she is old enough to understand, but you need to handle it carefully. Make sure she knows there is enough money for food and your house, but not money for extras. Show her some ways that you and your husband are cutting back your own expenses so she sees that you aren't getting any extras for yourself either.

Maybe you can avoid cutting it all together, but just reduce her allowance for awhile until you're back on your feet. Can you afford $5 per week? That way, she's learning that money isn't going to vanish entirely, but that sometimes we don't have as much as we want or are used to.

I wouldn't take any money from his parents and sometimes even the children get to feel a recession. It isn't the end of the world. I would however but half that birthday money into a savings account for her. I would also be good for her to learn to save money for long term instead of spending it all.

Getting her to start her own business or sell some of her lightly or unused toys would also be a great learning lesson for her during your tough time. She is 11 and in 7 short years will be legally an adult. This is the time to start grooming her towards adulthood and adults do go through tough times which don't last always you just learn how to make lemonade out of lemons.

See if you can get her on board and see if daughter can influence husband. Girls do have a special way on their daddy's that wives just don't.

I haven't read any of the other responses, but my guess is that I am not in the minority. I agree with you, and I think that you have already figured out what is appropriate. At 11 years old she is old enough to know about fluctuations in income, and in fact this will probably be a good lesson in appreciation and creative money management for her.
We recently went through a similar financial situation where every single dollar counted. There was no outside of the home entertainment, no extras from the grocery store, and having to turn down invitations from friends to join them for things that would cost money. So we had to get creative, and our kids did too. As awful as it was (I won't bore you with a lot of details, but it really was awful-husband lost his job,we lost our home, had to move, etc.) we actually bonded more as a family over the whole experience and came out better for it in the end because we went through it together. Our children learned valuable lessons in money management, and we learned a LOT too. Nothing like having it all taken away to make you truly appreciate it! Things are better now, my husband found a job, and our debt is paid off. Things are looking up, and we are a changed family (in a good way). It was very hard to do at the time, but my husband and I tried to see the good in the situation. I often found myself saying "You know, this is a good thing. I am learning to be happy with what I have, and learning about what a real need is vs. a really big want. I am learning about what I can get by on, how to make do with what I have, and patience to wait for those things I need but can't afford just yet.
Don't deny your daughter that experience. As you said, she is not going to be destitute, she has a back-up stash of money if she really wants something, and the yardsale is a great idea! We did two of those and sold tons of our stuff-necessary to pay moving expenses (those trucks are not cheap-nor are they easy to drive-just ask my FIL-LOL!)
This is a great opportunity to teach her about finances at a very impressionable age. Maybe she will grow up to make better financial choices than I did!
Good Luck!

I would tell her she is going to have to take a pay cut til things turn around.

Don't borrow money for her allowance.

She's 11. There is nothing wrong with everyone, including her, understanding that sometimes income varies. I would explain to her that right now not only will there not be the extras for anyone, but her allowance is part of those extras that will stop for now.

She might not totally understand it because she is young and not paying bills, but go ahead and tell her the truth. Sometimes that is exactly what works.

I agree she needs to learn to ride with the family. And what a great way to be resourceful and have a garage sale! In college my parents ran out of money and I needed to buy books. My summer job was over and my school job at the concessions stand at the arena had not yet stated but I needed books for the semester. I sold some of my sorority clothes and jacket. Got the important books I had to have and did some babysitting on the side two Friday nights. She needs to learn to be resourceful she might. Need it later in life! I see your update that $2 a week but I would talk to her and see if she can do without for a week and how she does. My 11 year old would have no problem with it and my 7 yr old son would flip. She's at a good age to "get it". Let's pray we all get jobs we all ate struggling. Hang in there this too will work out. That's what I keep saying!

I think this is a perfect learning opportunity for her! I would suggest sitting down as a family and talking about how things at work are slow for Dad right now and that means expenses need to be trimmed. I would tell her that you guys are working hard to make sure that your family has everything it NEEDS, but that some WANTS have to be put off for a while. Giving her an allowance is a WANT and that while it is important to reward her for her help around the house/chores, etc that you hope she'll understand the need for you guys to hold back her allowance for a couple of weeks until the situation at work improves. You can always do something special to thank her for the sacrifice (like a special outing) once things get better.

We have a town tag sale. It's online. I take pics and post items for a discount. Every 5 or 10 dollars I get really adds up.

Maybe you can have a toy tag sale in your yard to earn her allowance due to the circumstances right now.

I am hoping things turn around much sooner than expected !

Yes, reduce the money. Just explain it. I think you husband is wrong to try to shield her from the realities of life. I would just be matter of fact about it and not treat it like it is a big tragedy. Because you're right. No one will die without some extra treats for awhile. You can let her in a few of the "extras" you and her Dad will be cutting out too, so she won't have a good reason to think you're going after her personally. She can earn any extra money for spending herself. I think a garage sale and/or a lemonade stand is an excellent idea if she has the motivation for it.

I think the garage sale is a good idea. Explain to her that sometimes money is tight and you all have to think of creative ways to make extra money for your family. Have her decide what she wants to sell and then let her keep part or all of the money. Another good thing to get her in the habit of doing is to give some of her money. Take the proceeds from her sale and encourage her to donate some to your church or another charity. Good luck.

I agree with you! Your daughter will be just fine if you cut her allowance for the time being. If you can swing it, maybe give her $2/week.

But I think this is a great opportunity for her to understand your family's finances and the economy. If you keep her in the dark, she won't understand how to talk about money or how to handle it when she is an adult. And she will pick up on the stress you and your husband are under, but not know why.

You'll be fine. She'll be fine. Your husband's ego is bruised because he can't give him family what he used to. But if you tackle this as a team, everyone can benefit. Good luck to you!

Definitely sharing the hard times will make you all a stronger family. I grew up knowing we had hardships, although I am sure my parents did not let me in on every detail or worry. I learned to appreciate what we had without entitlement.

I get it's difficult, so as an alternative you might consider cutting the allowance to something more manageable. I did with my daughter when I couldn't do the $5 a week she was used to. I told her why it was hard at that time and she offered the suggestion. Currently, I don't give her one partly because of finances but also because we realized that she doesn't NEED it. I provide the basics (food, shelter, clothing) and the extras come more slowly. When we do have them we enjoy them together (just came back from a three day vacation). If she is going somewhere without me I give her some money with a discussion beforehand of how much she thinks she might need. I think as she gets older (she"ll be 13 later this year) we'll get back to an allowance. I'm actually looking forward to it because this time it will be a discussion with her about why she needs it, how much I can afford and how she will be earning it rather than just an expected privilege.

I have friends and family who see allowance as a must or have a very defined structure of how to earn it. Even a friend who keeps a credit account rather than giving thier kid actual money. The thing is that I see it works well in THAT particular family. I think that's the most important part of this, that it works for you. You may find that it works different ways at different times but it can always be a challenge to strengthen your family.

Good luck!

I think it is ok to drop the allowance but you must explain to her why. Maybe even suggest that you will try to give her a bit extra when things get back to where you can afford it.

Yes, you tell your daughter. NO, your husband absolutely should not borrow money to give her allowance, even if it is only from his parents. She has $200, for pete's sake.

You are 100% correct about riding the ups and downs with the family.

I would forbid my husband to do it.

Explain that you have to temporarily suspend her allowance to meet other more important bills, but soon as things improve you will put her back on the payroll. I cringe at the though of ever borrowing money from our parents or friends. Sounds like she has a good stash of cash. This can be an education in budgeting.