AOA 058: What Is The Art of Allowance?

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“We as parents will do our best to find a system that works well for our families. That is The Art of Allowance.”

— John Lanza

Just what does the phrase “The Art of Allowance” really mean?

Welcome to another Art of Allowance Podcast short! I’ve been seeing and hearing a lot of opinions about why an allowance is good or bad out there on the interwebs. So I recorded this brief episode to give you a broader perspective about what an allowance is and why I believe the art of it matters.

Please reach out to let me know what you think of these audio nuggets. I hope you enjoy this format, as I plan to produce more shorts that I’ll intersperse amongst the conversations to which you already listen. And as a heads up, I include access to our social accounts and weekly newsletter, “3 Ideas to Share & Save,” in the “Links” section below.

Links (From the Show)

Show Notes (Find what’s most interesting to you!)

  • Employing an effective and a purposeful allowance [0:32]
  • The great allowance / chore debate [3:02]
  • What is the value of an allowance? [4:30]
  • Adopting a “yes / and” perspective [5:05]

Click here for the full transcript.

If you liked this episode …

Want to know more about author David Owen’s allowance system? During his appearance on The Art of Allowance Podcast, David offers an interesting take on working in high school and the “life lessons” that kids might learn. Listen in at 47:04 for his thoughts.

Interested in more money-smart nuggets? Tune in to my first Art of Allowance Podcast short episode, “No Single Point of Failure,” which is an audio version of my short essay of the same name. In both pieces, I discuss how we can optimize the three major financial socialization systems to best ensure our kids grow up money-empowered.

Please Subscribe

If you like this podcast, then please give us a review and subscribe to the show. The Art of Allowance Podcast is available on iTunes, Spotify, Stitcher, Radio Public and now Amazon Music. Subscribing is free, and it will help me produce more enriching content for you to enjoy. Thanks!

You might also want to check out The Art of Allowance Project, our reimagined program to get your children excited about money smarts at any age. Until next time, I wish you and your family well as you journey forth.

Thanks for listening!

John

Full Transcript

This transcript is from The Art of Allowance Podcast, Episode 58, featuring host John Lanza.

00:00:00,299 [John Lanza]
Hello, and welcome to this Art of Allowance Podcast short. I’ve been seeing and hearing a lot of opinions about why an allowance is good or bad out there on the interwebs, so I recorded this short episode to give you a broader perspective about what an allowance is and why I believe the art of it matters. [instrumental music]

00:00:32,159 [John Lanza]
Hello, and welcome to this Art of Allowance short. I’m John Lanza. I often see folks questioning the value of an allowance, and I’d like to respond with my perspective. When I wrote my book, The Art of Allowance: A Short, Practical Guide to Raising Money-Smart, Money-Empowered Kids, I thought about trying to coin a clever new phrase to replace “allowance,” because I know some folks bristle at this idea of allowing their kids to have money. Still, “allowance” is a term that most folks immediately associate with raising money-smart kids. So I decided to focus instead on what I called the art of employing an effective and purposeful allowance. Now, listen. I recognize that every family is different and every kid within every family is different. That’s been my own experience, and it’s been the experience of every single family I’ve spoken to about raising money-smart kids.

00:01:36,839 [John Lanza]
So what we do here at The Art of Allowance Project is provide a framework rather than a do it this way or else kind of system for you, the parent, to be your kid’s guide on your family’s money-smart journey. That journey begins as early as two years old, and in fact, you can start an allowance with your kid as early as age four or five, because an allowance sets the stage for you to have an open, honest, and ongoing conversation about money.

00:02:08,499 [John Lanza]
Now, naysayers will often claim that an allowance is a giveaway. I agree with them. It is a giveaway if we’re not purposeful with how we distribute it. We must be intentional. We can start by offering some form of this explanation to our kids at allowance time. “I’m giving you this allowance to help you become money smart, and I am here to be your guide when you have any questions.”

00:02:34,899 [John Lanza]
It’s also important to define the purpose of an allowance. Its purpose is to help our kids learn to use money as a tool. We want money to hold no sway over them other than as a means to an end. With an early allowance, we can teach them the three basic money-smart skills: setting and saving for goals, making smart money choices, and distinguishing between needs and wants.

00:03:01,839 [John Lanza]
Furthermore, naysayers claim kids should work for their money. You know, chores. Again, I agree. I’m all for chores. But remember, a chore’s purpose is different from an allowance’s purpose. The purpose of chores is to teach our kids that work can earn them money.

00:03:25,359 [John Lanza]
We’re also not talking about house chores like making the bed or emptying the dishes or clearing the table. These basic chores might be considered rent that our kids pay to live in our houses. These tasks are the bare minimum we ask them to do as members of our household. And most folks I talk to agree that kids don’t need to be paid for these basic chores.

00:03:49,699 [John Lanza]
The chores I’m talking about here I describe in my book as “above and beyond” tasks. Ones that you might do yourself or you might pay someone else to do. For example, cleaning the car or raking the leaves. Those types of chores. Chores that will teach your kids that work can earn them money.

00:04:09,759 [John Lanza]
But most kids’ ability to complete chores is limited at best. You’ll likely be pretty disappointed if you tell your five-year-old to rake the yard, let alone make his bed. And at young ages, you don’t want to miss the opportunity to give your children experience with money.

00:04:29,959 [John Lanza]
This is one reason why an allowance can be so valuable, because it’s an easy way, when done purposefully, to give our kids opportunities to practice using money, to get comfortable using money, all at a young age. And we all know that experience is an excellent teacher.

00:04:49,259 [John Lanza]
And remember, allowance helps open a dialogue with our kids about money. This is one of its primary benefits. We establish that our family is comfortable talking about money. It’s not a taboo topic. And we want to start this conversation as early as possible.

00:05:06,399 [John Lanza]
And I want to close with my biggest concern. Naysayers often turn this conversation into an either / or scenario. Either allowance or chores.

00:05:18,779 [John Lanza]
I believe we’re best thinking about this conversation as a yes / and situation. Yes, I provide an allowance to my kids, and I include chores as part of my system so that they learn they have to work for money.

00:05:34,779 [John Lanza]
Each of our families’ systems will, of course, be slightly different. But all of them can begin with a starter allowance and then move towards a structure that adds in more chores. In fact, some families may move entirely away from allowance by the time their children are in middle or high school, with chores or even jobs outside the home providing all their kids’ incomes.

00:05:58,659 [John Lanza]
And other families might think like First National Bank of Dad author, David Owen. He considered school his kids’ primary job, and he willingly provided them some form of an allowance.

00:06:11,598 [John Lanza]
Of course, as I say in my book, if you just can’t get past the term “allowance” and don’t feel comfortable with it, then focus on a chore-only system. It’s more important that your kids get money practice than it is that you follow this framework that I’ve explained.

00:06:27,577 [John Lanza]
As with most everything in life, there are simply no absolutes, but there is one thing we can all be sure of, and that is that we as parents will do our best to find a system that works well for our families. That is The Art of Allowance.

00:06:47,237 [John Lanza]
I hope this little short helps you, and don’t forget to enjoy the journey. [upbeat music]

00:07:00,737 [John Lanza]
I really appreciate you taking your time to listen to this short. I hope you found it useful. You could find detailed show notes for this and all past episodes at themoneymammals.com. That’s our home page. It’s T-H-E M-O-N-E-Y-M-A-M-M-A-L-S.com. Just click on the podcast and blog link at the top of our home page and discover our entire podcast archive. And if you like my work here, please, please leave a rating, or even better, a review on whichever service you use to stream these episodes. You’re part of our money-smart movement, and this podcast plays an important role, and your rating and review will help other people like us find this material. And lastly, if you’d like three ideas to help you raise money-smart kids delivered directly to your inbox each week, I think you’ll really love my weekly newsletter. Just click on the little purple circle with the chat icon at themoneymammals.com and select, “Get our newsletter.” And until next time, enjoy the journey! [upbeat music]