Money Monday . . . Allowance or Commission?

If you have listened to Dave Ramsey you have probably heard him say that he doesn't do allowance he does commission.

An allowance is defined as:
1. The act of allowing.

2. An amount that is allowed or granted: consumed my weekly allowance of two eggs.

3. Something, such as money, given at regular intervals or for a specific purpose: a travel allowance that covers hotel bills.

A commission is:

4. A fee or percentage allowed to a sales representative or an agent for services rendered.

As of now, we choose to do the commission route. Our son is 3 1/2 and he is quite the capitalist already.

We have a "responsibility chart". It is already filled out with things for my son to do such as brushing his teeth, making his bed, cleaning his room, helping his sibling(s), using good manners and other tasks such as that. He gets a check for each thing he does everyday. At the end of the day we put the total number of checks in the box. At the end of the week we add up how many checks he got and my husband pays him $0.25 per check (high, I know!). Then we immediately take 10% and have him put it in his piggy bank. We take the other 10% and have him save it for tithe at church the next day. We allow him to spend the rest as he wants to right now. We of course, guide him into making good choices with his money, but lets face it - he's 3 so toys are what he thinks about right now.

I have found that this system is working. My 3 1/2 year old son did something amazing tonight. He came up to me and said, "Mommy, come and look I cleaned my room." I was skeptical because we had not asked him to clean his room so I checked it out and he had cleaned his room! The toys were put away along with his clothes. I was so proud and amazed! Then I realized the motive. He had been carrying around the Toys R Us ad from today's paper. He already had some toys in mind to buy.

But hey, at least he is learning that he must do something in order to be paid for it. I think whatever you choose to do with your children, whether allowance or commission is fine. Either way as long as you are teaching them how to handle their money and what is a priority then you are doing the right thing.

Of course as our son gets older we will steer him in a direction of giving and not just buying toys for himself. Although he always wants to buy toys for his cousin too.