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| Parenting |
Making Allowances for Youth
Mary Lowengard
04/01/2004
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Two decades ago, Dirk Jungé, chairman of Philadelphia-based Pitcairn Trust,
found inspiration in a conference session devoted to children’s allowances. He
returned home and immediately put each of his four children—today in their late
20s and early 30s—on allowances specifically designed, he says, to be equal and
fair. Jungé gave his 12-year-old son $10 a week, after considering the boy’s
age, his friends’ allowances and his actual needs. He gave his other children
stipends that were set proportionally to his oldest son’s, based on their age
and circumstances. “Over the years I adjusted for inflation, too,” he
adds.
 Up until high school, the Jungé family allowances were doled out each
week. Then they were paid each month, so the children could learn budgeting and
planning skills. By the time Jungé’s son was a senior in high school, he was
able to responsibly manage a lump sum of $150 a month. “Before the next
installment, we would have a dialogue about what that child had learned and what
he or she might do differently with next week’s or month’s allowance,” he says.
This dialogue, Jungé feels, is the most important part of the allowance
process—not the actual amount given. It was, in a fundamental way, a form of
hands-on financial home schooling.
Jungé regards an allowance as an essential
ingredient to successful parenting. It is also a once-in-a-lifetime chance to
build independence and family values. “If you indulge your children in
everything they want,” he says, “you are forfeiting the opportunity to give them
the skills they need to be an integrated member of your family.” For two
decades, he adhered to this program, making it a family tradition. “The level of
maturity my children show when talking about money is surprising. The training
provided a natural bridge for them to be able to deal with more sophisticated
aspects of financial management as they became adults.”
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