There are many things parents need to teach their children. One of the important life skills that kids need to learn from a fairly early age is money management. Oftentimes, parents will help them learn that skill through giving them an allowance.
Allowances for kids have a number of benefits, including:
•Teaches money management skills such as saving, spending wisely, and budgeting their money as they save for certain things.
•Allowances give kids a feeling of independence as they spend their "own" money on the things that they want.
•They allow kids to make mistakes with money and learn valuable lessons while they're young, instead of when they are older and more is on the line, such as credit scores.
According to experts, parents should start giving their kids an allowance when they are old enough to understand basic concepts of money but young enough that they will still listen to and take their parents' advice when it comes to the importance of saving and not wasting money. Between four and five are good ages to begin giving kids an allowance.
If you are giving your child an allowance, one of the things you will have to decide is what expenses that allowance will cover. Will it cover extras, like toys, candy, movie tickets, or make-up? Or is the allowance expected to pay for things like school supplies and school lunch? These are all things that should be decided.
Should kids have to earn their allowance?
Another major thing to take into consideration when giving kids an allowance is whether or not they should have to earn their allowance. Some parents feel like instead of giving their kids handouts, the kids should have to work for their money by doing chores around the house.
While this may sound like a good idea, consider all of the ramifications that go with making kids earn their allowance. By giving kids an allowance for doing chores or helping out around the house, some experts feel like they are missing out on the valuable experiences that come with doing chores simply because you are a part of the family, including cooperation and a sense of duty to help chip in.
In addition, if allowances are tied to expenses such as school lunches or supplies, it can be difficult to enforce the consequences - you don't want the kids to go without lunch because they didn't clean their rooms.
As kids get older, they often get money from other sources, such as babysitting or part-time after school jobs. When this happens, the money they are getting from other sources is often more than the allowance, so kids may start to neglect their chores. Not tying chores to an allowance gives kids a sense of duty in order to help out around the house with the family. If kids are only in it for the money, they are missing out on that important lesson.
Most experts will agree that having children earn their allowance is not a good idea, as it takes away from the feeling of responsibility to help out around the house. As an alternative, you could give kids a chance to earn extra money by doing extra work or chores around the house.
Whether you have your kids earn their allowance or not is up to you, but keep the above points in mind when taking it into consideration.