Should You Give Your Kids Allowance? – Part 1
There are different opinions about whether to give children allowance or not. Some people believe that kids only should receive allowance in exchange for doing chores or getting good grades at school. Other people think that kids shouldn’t be paid for doing regular contributions that are expected from every family member. These parents pay their children on a monthly basis or only when they need a certain amount of money. Another group believe that kids should work for themselves from a certain age and earn the money they need.
To learn how to drive, we have to actually sit behind the wheel of a car. And to learn to manage our money, we need to have money and learn how to use it. Giving allowance will help kids become familiar with the concept of money from a young age and will teach them how to manage their financial problems when they get older.
Giving allowance to your children has some good and some negative effects. In this part, we will discuss about the multiple benefits of giving allowance:
The most important benefit of giving allowance to your kids, is that it teaches them how to manage their money when a financial crisis happens in their life in the future. Also, the money you give your children will help them in their decision making ability and teach them how to have controlled spending habits. Children who are more exposed to money from a younger age will have more experience in the future when it comes to managing money.
Allowance will give your children a sense of responsibility. When kids are responsible for protecting their own money, they become more conscious of how they spend their money and begin to learn how to save it. In addition, when you give your children money, you give them freedom to spend it on whatever they want, which helps them learn how to make different decisions and get familiar with the concept of personal freedom.
Giving allowance to kids can greatly increase their happiness and make them more grateful for what they have. When you pay your child for doing chores or having good grades, they will learn to be thankful for what you provide for them.
In order for your children to be able to take care of their financial situation and easily manage their income and expenses when they become independent, you need to teach them how to budget their money and plan for the future. Ask them to plan for their monthly allowance and write their goals on a piece of paper. If you want to learn more about budgeting, click here to read our previous posts.
Another great advantage of giving allowance to kids is to teach them the importance of saving money. We have talked about how to save your money and the benefits of it before. Encourage your children to save a portion of their allowance and reward them at the end of the month if they succeeded. That way they learn to save their money and realize it will help them in the future.
In the next part we’ll discuss about the possible disadvantages of giving allowance to children.