Should Your Child Get an Allowance?

Remember your excitement when you got your allowance money for the week?  And remember how you would spend (or save) it?  It turns out that there are a good number of benefits to giving your kiddos an allowance.  

Done right, it can be a great way to teach your children about money matters, spending, saving, and set them up to be fiscally responsible adults.

Establishing Good Spending Habits

Even for young children, getting an allowance and learning to spend it wisely is a great first lesson in home economics.  For instance, if your kid wants a certain toy or game but doesn’t have enough money right away, teach them how to save up and delay gratification to a future date.

A Reward for a Job Well Done

If your children did a particularly good job on chores this week or helped you clean out the garage, it is okay to add a “bonus” to their allowance for going above and beyond regular expectations.  This teaches them that there are rewards for doing a job well, helps them understand what it means to strive, and is a sort of precursor to getting a raise on the job when they get older.  It also helps build a good work ethic and sets them up to be more successful in whatever career they choose.

A Sense of Independence

There are also emotional aspects to an allowance. When kids go into a store and buy something with their own money, it gives them a great sense of independence. They feel empowered, like a grown-up, and these emotions can add greatly to their sense of self-esteem and to their ability to be self-sufficient later on in life.  

An Opportunity to Practice Charity

Want a great way to teach your kids about helping those who are less fortunate? At the beginning of the year, have them save a quarter or fifty cents from their allowance and put it into a special jar each week. Let them know that they’re not allowed to touch this money until the holidays, when they can decide what kind of community program they want to give to. The Salvation Army, the Humane Society, or a local homeless shelter present great opportunities for them to give back to others.

Lessons in the Cost of Living

Sitting down and having a nice chat with your kid about macroeconomics probably won’t get you very far. But having an allowance will help them understand the value of a dollar – an important lesson that every child should learn.  An awareness of the power – and limits – of money will help them to grow into adults who are financially more astute.  

A Good Lesson in Saving

Apart from their charity savings, you should also have your kids set aside a small percentage of their allowance each week and for a savings account.  Many banks offer savings accounts for kids and having their own account teaches good lessons about the importance of putting a little of one’s income aside for the future.  It is also a good demonstration that a little money, saved regularly, can really add up over time.

Do you give your kids an allowance?  Why or why not? Tell us in the comments below!

Tags : life lessons   money   allowance   home economics   

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