The $100 Allowance: A Lesson in Independence and Budgeting

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In a moment of inspiration, my 13-year-old daughter, Lily, proposed an interesting arrangement: “If you give me $100, I’ll cover all my expenses for the entire school year.” This idea was inspired by her cousin, known for their frugality.

Curious, I asked, “What do you mean by ‘everything’?” My husband chimed in, suggesting she draft a proposal. With excitement, Lily grabbed a pen, dreaming of the possibilities that $100 could bring.

Initially, I was hesitant to part with such a sum. However, it soon became clear that her plan could ultimately benefit me economically. Thirteen-year-olds yearn for independence, and Lily was no exception. She wanted to decide on her clothing, bedtime, and even her packed lunches. This seemed like a perfect opportunity to foster her independence while also teaching her valuable budgeting skills.

Lily’s proposal was extensive: it included everything from clothing and shoes to snacks and birthday gifts for friends. I was skeptical, as I knew $100 wouldn’t cover all her needs. Yet, she insisted she could manage, and I ultimately signed the agreement.

In September, her spending began. She purchased:

• $20 in school supplies, including colorful pens
• A $5 shirt from a popular retailer
• Two lip glosses totaling $7
• A pair of wedge shoes for $30

I couldn’t help but gasp at the price of the shoes, prompting a slight annoyance from her as she reminded me it was her money. I promised to keep my opinions to myself. However, within half an hour, after realizing her dwindling funds, buyer’s remorse kicked in, and she returned the shoes.

September was a blissful month for Lily. With her newfound wealth, she indulged in candy bars and discounted jeans, even rewarding her siblings for small favors. But by October, the reality set in. After purchasing a fashionable coat for $40 on October 1st, she was broke by October 2nd.

On October 5th, with worry etched on her face, she suggested, “I think we should reevaluate my budget.” I couldn’t help but smile; the terms of our agreement were clear—there was no room for negotiation. Determined to regain control, Lily sought ways to earn money. She asked if she could babysit during my errands and inquired about getting paid for chores at home.

She distributed flyers in the neighborhood offering her services, especially with Christmas approaching. As her desires grew, so did her financial literacy. She started picking up loose change and practiced the piano more often to earn money from her grandmother. She even began accepting babysitting jobs that she previously deemed unworthy.

Interestingly, this experience proved educational for me as well. I’ve always enjoyed shopping for my kids, but when Lily received her allowance, I realized I had to resist the urge to intervene. I did buy her a Chapstick one day, to which she joyfully exclaimed, “Thank you, Mommy!”

Over the month, I witnessed Lily enhance her money management skills. She didn’t beg for clothing anymore; she embraced her independence. Strangely enough, her gratitude for my contributions increased.

An unexpected outcome? Her younger siblings now want their own $100 allowance. Rather than feeling overwhelmed, I see the potential for more spending money in our household.

Recommendations for Implementing an Allowance:

• Clearly define expectations: Decide who pays for what; children can cover “extra” or “fun” expenses with their own money.
• Help your child differentiate between wants and needs, creating two distinct lists.
• Guide them in developing a personal budget and document their plan.
• Sign the agreement together and maintain a simple ledger to track income and expenses.
• Resist the temptation to bail them out or purchase items for them!

Although Lily hasn’t yet taken me up on the offer to earn money through chores, I remain patient. I understand that when she truly needs funds, she will approach me for opportunities. My mother often stated that chores were meant to build self-esteem—a connection I dismissed at 14. Now, I see the empowerment on Lily’s face when she earns something she truly desires. It’s the essence of happiness.

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Summary:

In summary, Lily’s $100 allowance experiment taught her crucial lessons in budgeting, responsibility, and independence. She transitioned from carefree spending to financial awareness, ultimately enhancing her appreciation for the value of money. This experience not only benefited her but also provided valuable lessons for me as a parent.