Are allowances even a good idea in the first place? My parents never gave me an allowance. I did chores, and I was compensated for my work. It gave me a deep understanding of work, and it was simple to go from "working" for my parents to working for other people. What does an allowance teach children?
I'm not so sure that I want to be teaching my kids how to work for other people. If anything I'd rather teach my kids how to have people (or money) work for them.
I'd much rather teach my kids how to be responsible and do something because it needs to be done, and not just for the money.
I want teach my kids how to manage money responsibly. To some degree having them realize that it doesn't come easy helps yes, but linking it to work is not the only way. You can link it to good behavior, grades, self control, and many other things that are more valuable to teach than how to work for other people.
Plus some of the most important lessons in employment can not be taught until after the person has their first real job. Such as: the company does not care about you. They just want to squeeze as much work as possible, for the least pay. They will give artificial deadlines and scarcity to try to get you work more efficiently. They will try to get you to be loyal to them "be a team player".
It's pretty hard to teach those things if that first employer is you.
Personally BTW I don't give an allowance at all. I see no need to teach kids how to spend money. (i.e. get in the habit of spending money) If you need something you (your parents) buy it, that's all. You don't need to spend all the money you make - which is what happens usually with allowances (or they save for a while for something, which is the same thing - spend what you get).
That was an allowance the term is still used when it's connected to chores. The value of an allowance is it teaches children how to balance spending ex: between cheep short term wants and more expensive long term ones. Without an income children tend to just keep asking for stuff independent of how much it costs and the last time they got something.
My parents almost never gave me any money directly. My dad did teach me to sell though. From 12-16 I made some of my money selling misc things at flea markets and the like on weekends.
Probably some of the most valuable entrepreneurial learning I ever got was standing in front of a booth trying to convince people walking around to come over and buy something.
I probably had a half dozen "businesses" with different friends and family before I was 18. Much better than an allowance.
Same for me. I asked my Dad for an allowance once. He laughed and said, "You're barely earning your keep the way it is!" Then he sent me back to work. The end.
this is actually pretty brilliant on eBay's part, since it'll get the kids to only buy on eBay, since thats pretty much the only place where buyers accept paypal(yes others accept paypal too, but on eBay pretty much everyone does).
So it'll generate them fees from sales, and they'll condition the kids to buy their stuff on eBay instead of other sites.
Paypal also has a browser plugin which will generate a one-time Visa card number, for use on sites which don't accept Paypal.
I hear there are some sites on the Internet which take Visa.
This instantly solves a pressing issue for many 13 year olds, namely, how do I pay for my WoW account? And now Ebay will happily take, hmm, about fifty cents of every month's bill. Oh, want to order from Amazon? You can do that, too. iTunes? You can do that, too.
And when you get to 18 and can finally get a real honest-to-God debit card... why bother? You know how to do things via Paypal.
I think this is brilliant. (Note: no financial interest in eBay, aside from moving five figures through Paypal this year.)
