How an allowance teaches kids about money

Should you give your kids an allowance? How much should you give them? Your kids have been clamoring for an allowance for a long time. And you’re on the fence — who has extra money to spare, anyway? Here are five reasons you should cough up the cash — and how to make it work for you.

Child Counting ChangeIn homes around the country, Sunday mornings are filled with a holy ritual: the giving of allowance. If your children have not yet been a part of this special ceremony, they probably choose this time to remind you of that fact, week after week.With budgets stretched tight, coming up with extra cash isn’t high on anyone’s list — especially for the kids to waste! But, there are quite a few good reasons to find a way to get some money in to your kids’ hands. Take a look.

1. Kids usually spend less of their own money on junk.

It’s super easy for kids to ask you to spend $2, $3, or even $300 of your hard-earned dollars on something they want. But when you turn the tables and suggest that they cough up their own cash, they begin to realize how the money game works.

2. They learn from their money mistakes.

Sometimes your kids give in to temptation and buy junk they don’t need. Or they lose a wallet full of cash because they’re careless. Or they don’t budget wisely. And when they screw up — and they will, oh, they will — they learn a lot faster than you could ever teach them.

3. They take better care of junk when they buy it themselves.

Even though it pains you to see your kids throw away their money on junk, let them. And see how their attitude towards the junk changes. They are far more likely to pick it up, put it away, and care for it when they spend their own money own it. That’s a valuable lesson, even if it’s learned over junk.

4. You have something to take away.

Allowance can be contingent upon grades, behavior, chores, or anything you choose. It’s a great enforcer, because kids love getting money. If you write out a contract for allowance, when your kids don’t comply with the rules, you can just point to the chart and say, sadly, “Sorry.” Try to sound like you mean it.

5. You can teach money management.

You can make your lessons as simple or as complex as you want. Set rules about how much goes to savings, charity, and pocket money, or just give your kid a list of things he’s now responsible to pay for on his own. Figure out what will work best for your family and your child’s personality, and go from there.

Making allowances work for your family

One of the hardest things about giving kids an allowance is remembering to have the cash handy on the designated payday. Instead, keep a paper log of allowance. It can be as simple or as fancy as you want — an index card for each child on the fridge, or a full-blown chart with a plastic sheet cover and tons of decorations. Write the date and the amount given, and keep a running total. If you require kids to donate and save portions, keep those running totals as well. Then, make a monthly bank deposit or charity donation and hand over the rest — or let them come to you for on-the-spot purchases and so on.Allowance is a very individual decision. What works for your family might not be what works for anyone else — and that’s okay. Find what works for you and your kids, and stick with it.Let us hear from you! Do you give your kids allowance? What’s your reason? Comment below!

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