Children. They eat your food, live in your house rent-free, and mess it up to boot. Some kids even get an allowance for their trouble. An allowance for children is a regular amount of money given to them by their parents or guardian typically on a weekly or monthly basis. Let’s talk about the value of giving your child an allowance and some strategies for doing it.
Value of money
The prevailing belief used to be that giving children an allowance makes them more fiscally responsible as adults. Present research consistently finds no connection between receiving an allowance and good spending or savings habits. The good news is the effect of an allowance depends on the amount of education and monitoring the parents do with the child’s allowance. Discuss smart spending habits and saving habits with them. For example, if you decide to give them an allowance, guide them in how to use it such as setting aside some money for long-term saving versus spending it all now. It can give you a great opportunity to discuss money and financial issues as a family and also help you understand your child’s habits better.
Giving your child an allowance can give them some sense of independence and responsibility. They have their own money to spend as they please within whatever boundaries you’ve set as a parent which can make instil a sense of independence. It can also reduce conflict between parents and children about things they want and money. You can just buy yourself that packet of chocolates without having to ask your parents for money.
A version of basic income
If you’re progressive-minded, giving your child an allowance can be a tiny version of basic income. They get this money that they don’t work for or have to jump through hoops for and use it to meet their needs. It’s a lesson in the importance of people having their needs met even if they have no way of making money. Everyone should be cared for.
Strategies for giving your child an allowance
You give your child a designated amount of money each week or month for completing certain age-appropriate tasks around the house such as doing the dishes or making their bed. Proponents argue that it can incentivize them to take on additional responsibilities and understand that money is often a reward for work. Opponents question whether it instils in children a sense of ‘what’s in it for me?’ instead of responsibility.
The child doesn’t have to do anything to get the allowance. They just get a specific amount every week or month. Opponents argue that it teaches children to expect free money. Advocates argue that the benefits especially when it comes to sending the message to children that they are cared for and their needs can be met without them having to do something for it is a powerful one.
Consistency is key
Once you have a system in place, stick to it. Children value structure and consistency and it makes you trustworthy in their eyes. You want that. You want your children to view you as a trustworthy person, it will go so far in strengthening your relationship.
Consider the bigger lessons
As you embark on giving your children an allowance, take the time to think about the overall goals you’re trying to accomplish. What lessons are you trying to teach your child? Once you’ve determined that, you can ensure you get the best out of it especially when it comes to teaching fiscal responsibility.
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