When it’s time to teach your kids about the value of a dollar, one of the first steps is an allowance for kids. When you give them a few dollars a week, you give them experience with setting priorities for saving, spending, and managing their money. You also may want to offer them opportunities for charitable giving.
But what is? I mean – some believe money and kids should never mix. And there are persuasive arguments as to that. Of course, if we think of spending feuds in the family, which are more common than you’d hope, it’s reason enough to stop giving an allowance. But that’s not a solution. It’s just replacing a problem with another one. In the end, it all comes down to whether or not you can afford an allowance.
Given that you’re here, as a parent, I assume you do. And I also think some parents agonize between letting their kid have all the money in the world and keeping them on a financial leash. I’ll have you know that some websites and parenting guides propose an ingenious solution: start low, and then add a small amount every year. But maybe the kid won’t agree with that. Or maybe, if you start with a dollar a week at 4, 7 dollars at ten years of age will be more of a tease than a suitable amount of money for the kid to have.
Parents’ Take on Allowance for Kids
Like it or not, as a parent, it is you who has to decide how you want your kid to grow up. And more often than not, seamlessly innocent decisions can end up meaning a great deal in the kid’s development and adult-life behavior. We’ve researched the mistakes that parents make in respect to kids’ allowances, and we’ve come up with four basic don’ts that you should take into consideration:
Don’t Assume Your Kid’s Responsible
Kids are kids – they will always be irresponsible, no matter how much they may seem okay. Do not blindly raise the kid’s allowance as if they have gained your trust. It only takes one dollar too much for the kid to begin overspending. Be a silent watcher – look over the kids’ shoulder when he’s spending money. If you feel that you’re giving the kid too much – don’t stop. Instead, skip the next raise.
Don’t Give a Sense of Entitlement
Here’s one of the more complicated problems of giving allowance for kids. It has to do with the fact that kids, for the more substantial part, don’t work as much as their parents do. Kids not working is normal, of course, but it may lead to a false feeling of entitlement.
If you give your kid money regularly, and then even raise the sum from time to time, the kid may feel that it’s normal that he receive money. While in fact, he should know that he has earned his weekly allowance. The issue with this is that you can’t use a reward-based system. The kid mustn’t feel like an employee, with chores in their own house.
A possible solution? Deduct from the allowance if the kid misbehaves. Skip it altogether if you feel like he doesn’t desperately need the money. But also be mild and understanding – sometimes, don’t resort to monetary punishment when the kid least expects you to. It will come as a pleasant surprise, and it will strengthen the bond between parent and child.
Don’t Confuse Allowance for Kids with School Money
Seriously – don’t! Allowance for kids is something that comes once a week, has a fixed value, and that they want to spend on a toy, or a book, or whatever else they may want. School money is, in most cases, something that they need. Why? For food, of course. Or a soda – remember that kids are young and will like to get that new sweet from the store that everyone’s talking about.
Don’t Assume Kids Will Save Money
There’s nothing more terrifying for a kid to hear than, “why don’t you use that money I gave you.” Why? Because probably, possibly, maybe, I don’t know, they don’t have it anymore? Of course, that’s the reason. You’re giving the kid money to spend, not investing in your kid. Once the cash leaves your hand and goes to your kid, you can say goodbye to it.
Of course, you can try to fix this. There are many ways to guide the kid’s spending habits. But don’t expect the money to return unless you’ve followed the guide to how your kid can earn money.
Kids’ Take on Allowance for Kids
Put yourself in your kid’s place. Or if he/she is old enough to read, bring the kid over and show him the following. It might be an excellent piece of advice: kids often don’t know what they’re going to do with the money they get. This stems from two reasons:
Reason number one: they want too many things. As is often the case – kids want so many things, they actually don’t understand which one they want more. At a young age, parents need to help them manage this decision, but as kids grow, they must get their priorities straight when it comes to spending money.
Reason number two: they have unrealistic saving expectations. Remember that cool video game console they wanted to buy? Kids can save money, but the determination they need for something that expensive often is too much even for an adult.
So, kids, if you want something expensive, tell your parents. It’s better to have them by your side in your saving efforts. Parents, likewise, if your kid sees something expensive he/she likes, save that money somewhere in a jar inside a safe. Add to that sum every other day with your kid. And maybe even surprise the kid – put something extra on a day-off. Show that you care about the same things. And more importantly: show a productive attitude towards money.
Some parenting experts say that kids should be taught to divide their money into three piles (or jars). For spending, for saving, and for giving. While this is indeed an intelligent approach, it’s a rule that can be bent. In the end, parents and kids alike must understand that money is not only a helpful friend but a useful tool for a better understanding of the world around us. And it may be that not even parents know everything they should about money.