By Cindy Perman, CNBC.com
Parents tend to be split on the topic of whether you should give your kids an allowance or not. But one thing is for sure - kids will always ask for money. And more money. And more money. MoneyMoneyMoney.
Show me the money!A family friend's daughter recently declared that she thought she deserved a raise - from $1 to a whopping $10 a week.
When asked what she's done in the past year to justify such a hefty increase, she responded with a bout of the giggles and the only discernable rationale seemed to be that she was adorable. (If only we could pull that off with our bosses!)
In her defense, she really is adorable, but it raises a good point: What do you do when your kid asks for a raise in his or her allowance?
"First, take it as an opportunity and ask: Why do you need a raise? What would this be going towards? Are you going to take on more responsibility for more money? And what percentage of this money is going toward savings?" said Stacy Francis, a personal financial adviser and founder of Savvy Ladies, a group aimed at educating women about money.
Parents also have to put a raise in perspective for their kids. Explain that most raises in the real world are about 3 percent to 4 percent, or an extra 30 to 40 cents a week. Asking for an increase to $10 from $1 is a tenfold increase.
"First thing you do is calculate the percentage. Show her how astronomical that number is," Francis said. "That's pretty drastic. If you could get that raise in the workforce we would definitely not be in a recession we'd be in an expansion!" Francis said.
Do it in a way they understand. Say, she uses 50 cents of her current allowance to buy Skittles candy. If she gets a bump to $10, that's 20 packs of Skittles! (My tummy hurts just thinking about it.)
Then, translate that into what they're doing for their allowance.
"What are you doing for that dollar now? Maybe you're clearing the dinner plates every night," Francis said. "So now, increase it by 10 times. You clear the plates for breakfast and dinner, plus do eight other things. Is that worth it to you?"
OK, now my tummy hurts AND I'm exhausted just thinking about it!
"What's interesting about it - we still haven't said 'yes' or 'no' to the child at this point," Francis said. "You're just talking about it. You might be surprised - the child might say, 'You know what? I don't think it's worth it!' " she said. "You're making them think about money in a different way."
Jerry Lynch, a financial adviser and owner of JFL Consulting in Fairfield, N.J., agrees with the "extra jobs equals extra money" philosophy.
He's taught his boys to offer what they plan to do for the extra money from the get-go.
"Generally, if my kids want more money, they come to me with a list of things that they can do and we negotiate a price," Lynch explained. "It's usually things like cleaning the basement, cleaning their room, cleaning up after the dogs, etc."
His sons tend to come to him for more money before a family vacation - they want to get as much money as they can before they hit the beach, he said. They don't always have a number in their head, unlike our little $10 friend, they just think, "How can I make extra money?"
"I find if I just increase their allowance (i.e., salary), it means that I am paying them more to do the same things and I STILL get pushback to get their chores done," Lynch said. "I find that giving them a 'base with a bonus' I get more from them with a much better attitude!"
And, he, too asks them what the increase is for.
"It will blow your mind the things they come up with!" Lynch said. "So, now they know if they come up with something crazy, that I'm just going to shut them down - they'll come up with something more realistic."
If they want something really expensive, like say a $100 baseball bat, he'll have them work for two to three weeks to make sure they're really invested in this big purchase.
"I want them to have some skin in the game," Lynch said. "If he puts money into it, he's not going to be doing something stupid like hitting rocks with that bat."
Even if you're wealthy, Lynch said, it's important to teach kids the value of money.
"Even if I had unlimited wealth, I wouldn't want them to think they could have anything they want … In the real world, it doesn't happen like that. They're going to get shut down fast," he said. "I think the people who are successful are those who have learned by themselves and earned by themselves."
Most kids aren't naturally curious about money - other than wanting more - so you have to find a hook to lure them in.
"Ask the question, 'What's in it for them? What do they get out of it?' " financial adviser Francis said.
Lynch adds, "Don't always say 'yes.' Don't always say 'no.' Just make sure the numbers make sense. And figure out of what they want to spend their money on is really a priority."
A few pieces of advice for kids who are thinking of asking their parents for a raise, courtesy of wikiHow:
1. Prepare some kind of documentation explaining how much you get now, what you spend it on, what you need to buy, and how much more you need. If you go in prepared with what they want to know and well thought-out argument, your parents might be impressed and give it to you!
2. Accept more responsibility. It's best to learn now that there are no free lunches - figure out what you'd be willing to do for the extra cash and put that in your presentation.
3. Choose a time when your parents are feeling generally pleased with you. This is something most grown-ups know - you have to know when to approach the boss. If he or she has just had a tough meeting, you've just screwed up, choose another time. Treat your parents like the boss and time your request to maximize your chances of them saying "Yes."
4. Negotiate. Understand that if you ask for $10, you won't necessarily get $10. Be prepared to negotiate - expect to have to do more for more money. And, don't expect the full $10 - if you expect less, you won't be disappointed, you can only be pleased with getting something or the full shot!
5. Don't beg, wine, argue, yell, or fight. "It's unattractive and a little pathetic," wikiHow says. "It fails to convey the impression of a responsible adolescent."
6. Don't be disappointed if you don't get what you ask for. "Instead, make sure you are doing everything they expect, plus more. Leave them little notes after you do something extra saying, 'I accept tips!' "
7. If you still don't get the money - set out to find a new job. This is what you'd have to do in the real world. Remember, if one door is closed, try another one. It just may open! That means, if your parents won't give you the money, offer to mow the neighbor's lawn, walk their dog or babysit their kids. It's a good lesson for business - find out what the other side wants or needs and what you can offer them.
OK, on your mark … get set … negotiate!
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By Cindy Perman, CNBC.com