Teaching Kids
Money Basics

Many parents give their children allowances to introduce principles of money management. Sometimes, allowance is tied to chores around the house, and sometimes not. No matter how or why, though, allowances involve another issue: Should you, as the parent, have final say in how your child spends his allowance money?

Whose money is it?

When we first started giving our sons an allowance, I just handed it over, thinking that was it. And it kind of was. For a while, they just liked having the money, they didn't want to spend it on anything specific. I was fine with that and didn't give the rest much thought. But eventually, they had enough to buy a toy themselves (albeit small) and asked to go to the toy store. Fine, I thought. Apparently, what I thought was indifference and/or good saving was something entirely different: The boys were plotting.

At the toy store, they wanted something kind of horrible; they wanted to pool their money and buy a really cheap, violent, plastic toy. I was fairly horrified that they wanted such a thing ("I raised you better!" I ranted in my own head), and it was the kind of thing I would never in a million years buy for myself or another child. Although I believed that my kids should be able to make mistakes with their allowance money, I'd put my foot down over this kind of item!

"It's our money!" the boys protested, and they had a point. Then I explained myself and my concerns. After our discussion, the boys agreed that perhaps that toy was not the best use of their money. They did not buy it. Instead, they bought something equally cheap and plastic-y, yet not as violent -- and they played with it exactly once.

Whose mistakes are they?

Yes, your child will make some mistakes managing their allowance money -- and they need to make them. Better to learn these lessons now in a microcosm than later! But you can still guide, give advice and make suggestions no matter whose money it is or whose mistakes they are. And you can talk about saving, charitable giving and investing, too.

Of course, giving input is easier when your children are young. Being active and proactive in discussions about how and why to spend allowance money at an early age will instill the lessons for the later years. There's no guarantee your 12-year-old won't buy something ridiculous that she'll regret, but maybe she'll have a better understanding of her actions and the flaws in her decision making when she realizes it was a mistake.

Whether you feel you should have a say in how your kids spend it, an allowance is an excellent tool to teach about money; just make sure you're teaching the complete lesson. They can (and will) make mistakes as expected and necessary, but at least they will learn from them.

Tell us: Do you have a say in how your child spends their allowance? Comment below!

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