10 Oct Should You Give Your Child an Allowance?
Many parents struggle with whether to give their child an allowance. But the questions extend beyond “yes” or “no.” How much should you give? And how often? Should allowance act as a sort of payment for helping around the house? Should the amount be tied to grades and report cards? And what if your child compares your system to how his friend’s family does things?
If you received allowance as a child, you may automatically do things the same way your parents did. But many parents and parenting experts offer varying advice. The debate reminds us that an allowance is actually a pretty big deal from the child’s perspective.
Denise Cummins, Ph.D, writing for Psychology Today says, “They are a child’s first exposure to the power of personal choice that financial means can bring.” So think carefully about how to approach this rite of passage.
What is the Norm for Allowance?
According to Time magazine, in 2015, 70% of children received an allowance. But while giving an allowance is common, amounts and tactics vary widely. In other words, there is no norm. Some parents use it as a reward for chores, while others treat it as a learning tool unto itself. Parents choose different ages to start, some as soon as the tooth fairy visits for the first time. Simply put, allowance works any way you choose. Put some thought into it and discuss it with your spouse or co-parent. Figure out what works for your family.
Arguments For and Against Giving Your Child an Allowance
No one wants a spoiled child. Some parents fear giving a child too much, especially if not in return for effort, creates materialistic brats. Additionally, many parents feel that helping around the house should not need to be rewarded.
Another anti-allowance argument centers on children constantly asking for more. CNN Money suggests a flipside: “Instead of grimacing when your children hit you up for a raise, decide when the time is right and then engage them in fruitful negotiations.” These experiences pay off later in life.
There is, of course, another way of looking at any of the “cons.” Giving children their own money builds responsibility. A bit of financial freedom empowers them. It provides them room to make small mistakes now rather than big ones in adulthood.
Little Small Business Owners
If you’re an entrepreneur, the subject of money management might hold special significance for you. You probably wish to pass on your values to your children.
Some proponents of allowance suggest that it cultivates work ethic. Author Ron Lieber says most parents “don’t focus enough on how their kids use money, nor do they push them hard enough around the house.” He says that, instead, parents should involve children in the household finances. He suggests starting as young as preschool, giving a dollar per week for every year of age. In other words, give a four-year-old $4 a week. He then recommends teaching kids to budget that money. They should divide it into categories: “save,” “give,” and “spend.”
As kids get a little older, you might add an “invest” category. Perhaps your child has an idea for an invention or creative project. If you wish to encourage those pursuits, setting the foundation of money management will allowance will pay off.
Go ahead and talk to your kids about how you run your own business. Model responsibility and you may inspire tomorrow’s leaders.
However you choose to approach allowance, tailor your choices to your unique family. Don’t try to copy someone else. Consider your values and the future you envision for your children. And remember, it’s okay to make changes when something doesn’t quite work.