My youngest just turned 13, and in our house that means you get a clothing allowance!
Why? Because I believe strongly that one of the most important lessons we can give kids is how to handle money and budget accordingly. When kids are given money that they are responsible to make last, then they are more likely to look for deals and less likely to worry about brand names. They become savvy consumers. And they learn the hard way what happens when you buy something that’s too expensive.
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Perhaps in your house thirteen is too young, but we thought our kids could handle it. Here’s how we did it:
1. Figure Out Clothing Needs
Basically, we sat down and figured out everything she’d have to buy this year (and it’s an expensive year because she needs new EVERYTHING since she’s growing. Even underwear. And socks. Probably the most expensive year she’ll ever have, since nothing will fit soon!). We figured out how much that would cost.
I made a spreadsheet with each item listed, along with how many a person reasonably needs, and how many she has on hand. The remainder is how many she will need to buy over the course of the year. I budgeted what a reasonable amount to spend on each item would be, and then we added it all up. So if she needs five T-shirts, but she only has 2 that fit, and it’s reasonable to spend $10 on each one, she needs $30 for T-shirts. Repeat that for each item of clothing!
2. Open a Bank Account and Hook it up to a Debit Card
Once we had the entire figure (and I gulped when I saw it this year), I opened up a bank account for her and transferred the money for the year in there. We hooked up it up to a debit card, so that she can have access to it when she shops. She now is responsible to make it last until next July. If you don’t have enough money all at once, you could always give it in installments, but we gave the whole thing. If your child has a bank account that he/she is using to save for something big, like college, use a different bank account that is just for expenses. You can usually get ones that are free, or with few fees, if the child is young.
They can then add their own spending money to the account, too. It’s not like they have to keep track of which money is for clothes and which is their own. If they want to spend more, they can. But the key is to not run out before the year does!
It’s now her money. She can spend it any way she wants. But if she spends it foolishly, she won’t have shoes. Or bras.
It also encourages kids to look for sales and shop in thrift stores, because then they keep more of the money.
3. Decrease the Amount Each Year to Encourage Self-Sufficiency.
Every year, we work through the spreadsheet anew, checking out their wardrobe and figuring out what is reasonable for them to need the following year. The key word is need, not want. One needs two pairs of jeans and another pair of pants, perhaps, but one does not need 10 pairs fo jeans.
Once I’ve figured the amount out that her clothes will cost, I decrease the amount we give out every year by about 10%. If the figure next year, for instance, is $450, I’ll give her $405. And the next year I’ll take a little bit more off, so that by the time she’s 18 she’s used to buying her own clothes. I also believe in encouraging children to work in some sort of part-time job, or in doing extra chores, so they actually earn their own money. My 15-year-old, for instance, has eight piano students, and teaches swimming at the Y. My 13-year-old will soon be doing our medical billing. So they have jobs.
Will it work? My older daughter has been buying her own clothes now for 2 1/2 years, and it’s great! I don’t have to worry about it, and she has to worry about budgeting. With the money she earns, she can supplement her clothing allowance. And she realizes that if she needs a new winter jacket or something that’s expensive, she’ll have to ensure the money for it is there when the time comes.
At age 16 we also add all toiletries to the stuff that we ask them to pay for themselves. Now we do give quite a generous allowance for doing chores around the house, so I’m not being mean. I do believe that parents should pay for necessities for kids. But I also believe that we need to teach kids to budget, and this is the way that we’ve chosen to do it!
What do you do? Share with me in the comments, and let’s talk!
Sheila is the author of The Good Girl’s Guide to Great Sex.
>I love hearing how this works at your house! My husband was raised with a "clothing allowance," which was the first time I had heard of such a thing.
It started around thirteen, too, I believe. He wanted Levis, not Wranglers, and his dad said, "Listen. I work for the State."
And the clothing allowance was born.
His parents figured out how much everything would cost, set the dollar amount, and gave the kids each their allotment for the year. When he started, it was around $200. They allowed for five percent inflation every year, but the dollar amount was fixed.
He had a few years when he couldn't afford new underwear because of his spending choices…new boots one year…and his parents just let him work it out. (He started delivering newspapers and bought his boots at a thrift store that year.)
Can I just say that this is an amazing gift to give your children??? The ability to plan your purchases and manage a larger amount of money?
By the time he and his sister (two years younger) left home, they were shrewd money managers. Their parents didn't have to worry about "out of control" college spending because they knew how to do it.
My husband still has his original "ledgers" where he kept track of his purchases and budget. He's great with money and financial planning, which is a huge boon for us as a family. (And I've learned from him!) Our only debt is our house. We've paid cash for every purchase, including new cars.
His sister was able to quit her job when my nieces were born and make her husband's inner-city high school teaching salary stretch, so she could be home when the girls were little. (They're teens now, and she's back to work part-time and is using that income to pre-pay their college tuition.)
We totally plan to do this with our boys.
>I can only refer you to the following posts on my blog: http://bit.ly/dq6WdD and http://bit.ly/cOFAMV
How fortunate are your children to learn from the get-go how to budget. My siblings and I were not taught to balance wants and needs nor how to handle money. This lack had a detrimental impact on our young adulthood.
>The only problem I see with your system is that you don't have any control over what they buy. What if your child (I assume your girls aren't) was a bit rebellious and bought t-shirts with inappropriate sayings or low, hip hugging trousers or too short shorts?? What would you do then?? Just curious how one would overcome such a hurdle with your system… My kids are still 10 and 5, so I am not at this stage yet, and haven't had this problem, but I could see it cropping up in some families!
Denise in Saskatchewan
>I think we need to implement this in our household! My kids are 15 and 12 1/2, so they're ready. I'm sending your link to my hubby to read, since he's the money guy. The hard part will be for me to figure out what's reasonable for them to need in a year and add dollar amounts to it. Also, my youngest is having growing spurts, too, so that has made the past year or so expensive and the next few years will likewise be expensive.
My hubby does the budget, but over the years I think it's evolved into bills, tithe, savings, and "wife/household/kids." I admit that finances are not my strong suit and I tend to buy things as the kids need them out of my household money (which is what part of it is for anyway). I keep tabs on what they wear most often, but I think my older daughter's wardrobe could use an overhaul.
I also enjoyed reading everyone else's comments; they're helpful, too.
>Oh Sheila – what a great way to handle that!
I'm thinking it through, how I could implement it with my boys, but I'm wondering about a couple things…
What if the kids really don't care how they look and will defer buying clothes in favor of saving the money for something else? This is probably more of a boy issue than a girls'!
I'm laughing at myself because on the one hand I'm thrilled that my boys couldn't care less about fashion or name brands, but on the other hand… I can easily imagine them not caring that things are old/stained/have holes etc. if they're "comfortable" and not bothering to buy anything new.
Hmmmmm…
I LOVE the idea, though. I've always thought it was kind of ridiculous to give kids a big allowance when they have nothing they're responsible for using it on.
We've always expected our kids to do "regular" chores without pay because we all work together to keep the home going, and then offered them occasional extra chores to earn money. But I can see how your method helps more directly with budgeting.
I need to think more on this one!
Thanks for the idea,
Julie
>Great comments here, and on Facebook! A few things I hadn't thought of because they hadn't come up in our house:
1. What if you have boys and they don't care how they look (as Julie said)? Good question! I think I'd take a bit of a hands-on approach and REQUIRE them to buy a certain minimum number of things. I can see a boy thinking, Wow! Tons of money to spend on video games as long as I don't mind doing without any new shorts this year! Not a good thing. So require that they buy a certain minimum number of items.
2. What about modesty? What if your kids buy stuff that you consider inappropriate? I hadn't thought of this because my girls are quite modest, so it's not an issue. But I see modesty and budgeting as two different things. Just because they buy it doesn't mean that you'll let them wear it! And if they spent their own money on something, and you then confiscate it (or require them to return it), they may be out some money or some time. So just talk to them first and let them know what you consider appropriate. They're still under your authority; you have the right to say, "you can't wear that", even if they bought it. So if they buy something bad, they suffer the consequences. If they know that up front, they're more likely to spend their money wisely!
>Great post! Clothing budgets/allowances have worked really well for our teens. The budgeting and spend tracking experience is always very educational.
One nuance to our approach: we decided it was "use it or lose it" in this category of spending. In other words, my son, who would happily run around naked, could only use the money in his clothing account for clothes and any leftover was zeroed out before the next year's credit. We use virtual online accounts at FamZoo, so that's easy to do (disclaimer: I'm the founder
We have some high level ground rules on what clothing is allowed, but pretty much try to stay out of the way unless an item is super-offensive or counter to our core values.
If interested, you can see what a budget looks like on FamZoo here:
http://blog.famzoo.com/2010/07/whats-your-teens-clothing-budget-and.html
Whether you use an online tool or excel and virtual accounts or real bank accounts, I highly recommend the concept. You'll be doing your kids (and yourselves) a huge favor.
>I like this a lot! My daughter is only 13 months old, so we're a ways off..but I want to be thinking now about how we will raise her ( and any subsequent children). I was not raised with an allowance or any really required chores. As a result, I was a pretty snobby, entitled little brat. Just ask my parents- they'll tell you! However, I DID learn a few things from my parents otherwise very wise financial decisions, and I worked a lot in high school and college. I turned out ok despite the bad start, but I'd like to give my children more structure and responsibility.
When did you start having your kids do chores? I wouldn't mind teaching her a few simple age appropriate tasks when she's old enough, and having an allowance. Maybe I'm wrong here, but my 4 year old niece isn't required to do anything around the house, and as a result comes over, makes messes, and then leaves. I don't like that- and I don't want my daughter to be that way. I realize kids will make messes, but I'd like her to have some ownership in cleaning them up, as well as in how the household runs.
Anyway..what did you do? Have any ideas for me?
I think kids can be taught to do “chores” about the time they start walking. My 14 month old takes her diapers to the trash, actually, she takes pretty much anything to the trash that I ask her to put in the trash. We’ve also been working with her to pick up after herself when she makes a mess, particularly when she pulls out something in our bedroom or the kitchen and scatters things all over the floor. She knows now what it means when I tell her she needs to pick things up and put them back in the bag/box. I had a couple “battles” with her the first few times I instructed her to pick things up, but she quickly learned what I meant and that it wasn’t an option. I just think it’s important that kids know from the beginning if they make a mess they need to clean it up, not expect mommy and daddy to do everything for them.
I hope this made sense, I haven’t been feeling great lately and have been having a bit of brain-fog!
>We've used a clothing allowance with our teens. Our oldest is now at university, so he gets a "life" allowance now, and he does fine. Our deal was $50 a month, and we paid for school uniforms. It really does take the pressure off decisions as a parent: my daughter likes to have lots of things to choose from, so she's compelled to shop for bargains — she trades with friends and shops Salvation army when she can. My son would spend $80 on a hoodie to get the brand he wanted in high school (now he'll spend the extra to buy socially conscious brands) but buys fewer things. As a parent, I'm not the one who has to decide — is $80 too much for a hoodie if that's all he wants? Are 3 shirts too many if they are on sale for $5? Plus, my kids actually appreciated getting clothes for Christmas! lol!
>Wow! This is the most incredible idea that I have ever read! I really think that we need to implement this at my house!!!
My oldest will be 15 this year and could benefit from this! She loves clothes and likes to look good! But she doesn't pay for it … I do! I think that this will teach her a lot!
Thank you! Thank you! Thank you!
>This is a fabulous idea! My daughter is only seven so we have a few years to go until this would work, but I am definitely going to try it when the time comes.
I was interested to read that at 16 they buy their own toiletries. My mom always bought "family stuff" (shampoo, soap, etc) but when I think about it, I did buy my own if I wanted something special (<–as in, fancy shampoo instead of the $1 off brand she bought) I quickly learned that using her "cheap" stuff was a better way to go and now that I'm the mom, I'm still buying the cheap stuff.
>I've never heard of a clothing allowance like this before…I love the idea! Thanks for sharing!
>That's a great idea!
>I love this post. I believe my parents did something like this. I remember pulling money out of my savings account as early as 6th grade, maybe even 5th grade (what is that about 11 yrs old?) to cover my school clothes for the year. I started doing "all" of the chores that same year when my sister graduated and left home. I began receiving a generous (for the time, 1990-ish) allowance. I also learned to be frugal with my lunch money so I could eat well and still supplement my allowance.
We just started this with our teenage daughter this month. It seems to be working well so far.
We also included a budget for all the discretionary stuff that she frequently hits us up for (meals outwith friends, movies, gas for the car, etc.) She gets bonus money for chore help too.
I think this is very important for instilling a sense of the value of money, making financial trade-offs and deferred gratification.
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I grew up with an identical system. At thirteen I was given 30 hours of work to do for my parents each month (we lived on a dairy farm, so coming up with enough chores wasn’t difficult!) In return I was given $200/month. $100 had to be put towards saving for university, $20 was tithed, and the other $80 went towards clothes, school supplies, cosmetics/toiletries, and anything else we might want that was unnecessary (novels, room decorations, movie tickets, junk food…).
We were of course allowed to work extra if we wanted more money, and we always had to do a few basic chores before our wage-earning hours started just because we were part of the family.
I’m 24 now and I have to say that all four of us kids are quite moderate with our money. We know how to treat ourselves, but none of us are in debt (other than mortgages & reasonable student debt).
I highly recommend doing this! My husband and I plan to do something very similar with our own kids (our first is nine months, so this is a long ways off). He grew up with something similar, but being a cheapskate by nature and not caring about appearances his mom ended up having to buy him clothes anyway just to keep him decent. She was a bit of a softie though
I would have made him buy a minimum of clothes!
Thanks for that encouragement, Amy! You know what I find so amazing? This is actually quite intuitive. I mean, it makes sense: if you want kids to understand money, you have to give them responsibility and then the opportunity to have to budget. And yet so few people do it, because it seems “mean” or something. So thanks for chiming in and showing that it does indeed work!
My parents didn’t do this a year at a time, but I do remember by high school my mom would just tell me how much $ I had to spend on clothes at back to school shopping time and what I bought was up to me. I went to a private Christian school with a dress code, and knew what my parents would and wouldn’t be willing to let me wear, so I don’t remember having any specific conversations about what would happen if I bought anything inappropriate, I just didn’t because I knew I wouldn’t ever get to wear it! I can see the benefit to how you set up the clothing allowance for the entire year as far as budgeting goes. My mom did it mostly so there were no arguments over whether or not one item was too expensive. When the money was gone, it was gone.
For my family, once each kid turns 14 they start paying 10%, with 10-20% increments each year. I think 18 is when the kid pays all 100%. It seems to work pretty well, but we don’t have to pay if we shop at thrift stores. Which is awesome!
Anyway, what you’re doing sounds like a good plan! I think it should teach responsibility to your children.