Updated: March 19, 2021
Originally Published: June 16, 2014
There are no sweeter words for a parent than hearing, “Mom, can I get underwear for my birthday?” When I chuckled, she insisted, “I’m serious!” And she truly was.
A year prior, when she entered eighth grade, my 13-year-old daughter proposed a single allowance of $100 for the entire school year. With this substantial amount, she declared she wouldn’t need a single dollar more for anything. She excitedly drafted the contract herself, and after some discussion, we all signed it.
She felt wealthy for a mere eight weeks, but then reality hit for the following eight months. Surprisingly, those months of financial limitation turned out to be quite beneficial.
Here’s what she discovered:
- The Hustle: My daughter embraced work like never before. She eagerly accepted babysitting gigs and sought out new opportunities to earn money.
- Creativity: Instead of costly outings, she engaged in free activities with her friends. During the holidays, she crafted her own gifts or shopped second-hand, which we appreciated just as much, if not more.
- Frugality: When faced with the price of a yearbook, she chose not to buy it. She stopped purchasing fast food during sports trips and opted to eat meals at home instead. Initially reluctant to join the eighth-grade trip to New York City because it would deplete her savings, she ultimately took on a babysitting job with me, and we spent the weekend caring for three kids. We both earned that trip, but only she had the chance to bond with her classmates on the bus. In hindsight, it worked out well. She took minimal spending money, which I felt conflicted about. The upside? She avoided junk food. The downside? No cheap souvenirs to toss out later. But perhaps that was a win too? What mattered most were the lasting memories she created.
- Independence: Thrilled to manage her finances, my daughter appeared more confident. Earning her way to the New York trip was tough work, and at times during the babysitting weekend, she asked me to leave so she could “be in charge” and earn her own trip. I found that admirable.
- Gratitude: The shift in her attitude was immediate. Whenever I bought her something—like her favorite soup at the grocery store—she was genuinely grateful. For Christmas, she requested running shoes and tall brown boots. Before her allowance, I would have purchased those items, but her newfound responsibility made her ecstatic on Christmas morning.
- Peace: Our disputes over clothing vanished. At the mall, she stopped pleading for the cute dress or the perfect earrings. Occasionally, she would suggest that I would look “really good” in a top she could inherit, but the nagging, pouting, and disappointment when I said “no” disappeared. Shopping together became enjoyable, as we discussed the pros and cons of purchases. Sometimes, she still tests me: “Please, Mom, please! I promise I’ll pay you back!” It can be hard to resist, but my husband often reminds me, “Stay strong.”
- Budgeting Skills: While calling her a “Budget Queen” may be a stretch, she does keep track of her finances. She maintains a ledger detailing her income and expenses: 10% for charity, 20% for college savings, and 70% for her discretionary spending. Websites like The Mint are fantastic resources for kids and parents to manage finances.
As she transitioned to high school, her allowance increased. Even with a larger sum, we still assisted her with necessary expenses like an iPad, sports fees, and unexpected costs. Though she can’t cover everything alone, we often split the costs, leading to more gratitude and understanding. Now, when she needs or wants something, she asks instead of demanding.
The lovely dress and matching shoes she bought for her semi-formal drained her hard-earned cash, but to her, it was worth every penny. She made that decision on her own.
This weekend, she’s babysitting after a busy week of school and sports, and she’s even lined up a summer job to save up more money. Sometimes, I worry that she’s taking on too much responsibility and missing out on the carefree moments of childhood. Is this a common concern among American mothers?
Life in our family is rarely perfect. We frequently implement new routines and systems, only to change or abandon them later. However, the $100 allowance worked well because my daughter initiated the idea and fully committed to it.
Oh, and yes, she did receive that underwear for her birthday, and she was genuinely pleased.
Summary
In this article, Sarah Dalton reflects on her daughter’s journey with a $100 annual allowance. Initially, the allowance made her feel wealthy, but it quickly taught her valuable life lessons about hustling for money, creativity in spending, frugality, independence, gratitude, and budgeting. As she transitioned to high school, the allowance increased, but the lessons learned continued to foster a sense of responsibility and appreciation. While Dalton expresses concerns about her daughter’s workload, she ultimately recognizes the positive impact of financial independence in their lives.