Giving kids an allowance is pretty common in many households. What is important to think about is why are parents giving their children an allowance, to begin with? Is it because they feel that that is what good parents do or everyone is doing it, so why not them?
Or, are they wanting to use an allowance as a tool to teach their children how to properly manage money? Whatever reason parents are giving their children an allowance, there is a proper way to do so.
The purpose of an allowance
First of all, parents need to consider the purpose of allowance and why it is they want their children to have one. If it is just to keep up with the Joneses, then that is not the proper way to give allowance. If it is to use as a teaching tool because allowance gives children an opportunity to learn how to manage their money well, then that just might be the right reason.
Bonuses rather than an allowance
There are many philosophies as to what allowance should be given for. The traditional way has always been to pay children for completing their chores. It has been thought of as the child having a job like they would as adults and getting paid for the work they do.
However, newer philosophies are saying that the children’s chores should be thought of as part of being a family. Children should not be paid for something that everyone in the family is expected to contribute to but they should be paid “bonuses” for doing work above and beyond the normal expectancy.
For example, the children could clean their room without pay, but if they choose to make a donation to a charity with clothes and toys they no longer use, they might be paid for going above and beyond the call of duty.
When to give an allowance
Again, there are many ideas out there for when a child should begin earning an allowance, but one thought is that they could begin receiving an allowance when they start asking their parents for money. If they start asking their parents for money to hang out with friends or to buy special gifts, it may be time for them to earn an allowance.
Teach about budgeting, giving, and saving
Teaching kids about money management is a smart thing to do as a parent. So, when it comes to an allowance, parents can use it as a tool to teach about how to budget their money, give to others as gifts, and how to save money. It can start as early as when the child makes their first dollar. Teach the children that money is a necessity in order for us to live well.
When parents decide that allowance is a relevant means of teaching their children the importance of managing money properly, is for doing things above and beyond the normal family expectations, and is age appropriate for understanding, then those parents have succeeded in properly giving their children allowance. What are your thoughts about an allowance?