One of the many struggles that parents have is over paying kids’ allowance. Of course, the question of whether or not to pay one is very common. Some people feel as though a child should not be given an allowance at all, while others feel as though it is a great opportunity to train their children.
[Find out what NJ High Schools are doing to teach personal finance and budgeting to students]
Beyond that struggle is the question of how much and how often to pay; and also if the payment should be tied to various chores and other responsibilities, or if the kids’ allowance should just be based on general obedience. As with most things, there probably isn’t a clear cut answer to this, because every child is different, and there are pros and cons in each case.
Still, that doesn’t prevent us from taking a look at this issue.
Should You Give Your Kids Allowance?
Teach Them Financial Responsibility
Once you start giving your kids allowance, you can teach them how to manage money. There are many different aspects to this – some of which we will discuss below – and although each one can be taught without giving your child an allowance, using real money can make things easier.
Understanding The Value Of Money
The first thing should happen when we pay our kids an allowance is that we teach them the true value of money. Kids aren’t born understanding the function of money in this society (I’m unsure if most adults understand this). They think that their parents have an infinite supply of money, or that it “grows on trees”, as our parents used to say.
Giving them an allowance, and making them responsible for saving, giving, spending, and maybe even investing, will help them to see how important each dollar truly is.
When they are spending your money it’s really easy for them to simply give in to their impulses. However, once they are down to their last dollar, they’ll have to give a lot of thought toward how to spend it. And if they don’t, they will have to deal with the same “buyer’s remorse” that adults experience.
Use their allowance to teach them to weigh their options and make the best possible decision.
Giving your kids allowance creates the perfect opportunity to teach them the importance of saving money! You can have them set goals and save toward them. It may be small and somewhat trivial like buying a PlayStation 3 Dualshock 3 Wireless Controller (do kids even play with Play Stations anymore?), or something more meaningful such as a birthday gift for their brother or sister.
Either way, they get to learn early lessons on the importance of saving and planning. To make it more interesting, you can provide an incentive to your child’s saving efforts. Maybe you can kick in $5 for every $50 that they save, or “pay” them regular interest!
To me, giving is an important part of any budget; and if you feel the same way, you’ll want to teach this lesson to your children early. Giving your kids an allowance is a great way to accomplish this! If you belong to a local church, that’s a great place to start! If not, then have them identify something that’s important to them.
Then you can find a charity that supports them (maybe an orphanage in Haiti), and have your child set aside a part of their allowance for donations.
The Cons Of Giving Your Kids Allowance
Despite these reasons, there are a number of people who don’t agree with the idea of paying an allowance to your children. By doing so, you can inadvertently spoil your child, and make them feel as though mom and dad are nothing more than just ATMs!
It Spoils The Child
Giving your child an allowance could help to spoil them. Keep in mind that you’ll probably buy them different toys, gifts, candy, etc. throughout the year, so adding a regular weekly or bi-weekly payment, can give your children a sense of entitlement. Of course, this isn’t a guarantee, but it does raise the chances of this happening.
This may cause your children to see you as an ATM, rather than as a parent!
Doesn’t Teach Them To Depend On Hard Work
By giving your kids allowance, it may make it difficult to teach them the concept of working hard for money. If someone gives you money each week, you may become conditioned to getting money without working for it. Many people in this society resent hard work and discipline – of course we can’t blame allowances for that, but it is something that you have to watch out for.
[What’s the connection between Hard Work and Faith?]
If Connected To Chores, They Don’t Feel A Sense Of Responsibility
I believe that chores are best used as a way for children to contribute to the household and feel a sense of responsibility. By attaching them to a payment, they may not see their chores as a non-negotiable obligation, but they might just regard them as something to do when they need money!
So what happens when they get money for other things (birthday, Christmas, or good grades)? They may lose the motivation to do their chores, and you end up in a battle trying to get them to handle their responsibilities around the home!
So What’s The Answer?
I believe the answer to this issue is to take all of these things into consideration. If you choose not to pay an allowance, make sure that you look for other opportunities to teach your children proper money management. Of course, if you do decide to go pay, try your best to avoid some of the cons listed above.
Ultimately, it comes down to how well you know the individual character traits of your children and what priorities you have set for your household.
photo by GoodNCrazy
- Did you get an allowance when you were a kid?
- What do you think are some potential problems to doing this?
- Do you think there is a particular age when you should start?