Should You Give Your Children an Allowance?

Should-You-Give-Your-Children-An-Allowance-by-Princess-Clarke-Wendel-300x199

Some say, “No,” while others say it’s okay to give your children an allowance. There is a rationale for both. Some believe that giving money to kids without expectations, breeds feelings of entitlement. They think that their children won’t be satisfied and will demand more money from the Bank of Mom and Dad. Others believe an allowance teaches children responsibility and decision making skills.

Everyone will make a money mistake. Your children will not be any different regardless which direction you take. They can make a money mistake under your roof. Today that simple mistake may cost them $5.00 or you can leave it up to them to learn how to do it on their own. Years from now, that same mistake might cost them $500 or $5,000! It’s up to you to decide.

An allowance is a good way to teach children about saving and budgeting. It may not be a surefire way to avoid ever making a mistake, but it just might prevent some undue hardships. How many of us have said, “If only I knew then, what I know now,” and felt a sense of regret? Probably far too many of us have felt that way, especially when it comes to managing money.

Below, I’ve gathered a few tips for parents who decide to give their children an allowance…

  • Do not put your children’s needs before your own. If you cannot afford to give them an allowance, don’t.
  • Tie their allowance to a goal or expectation. Tell them when they do their homework, keep their room clean and/or help their little sister or brother throughout the week, they’ll get an allowance. If they don’t follow through, they may not get any allowance or only a portion of it.
  • Give them a savings goal. A portion of their allowance should be set aside for saving for something they really want or for a vacation that you are planning on taking. This teaches them the valuable lesson of savings and rewards.
  • Set boundaries. Discuss with your children what their allowance can or can’t be used for. It is probably not a good idea for any child to use all their money at the candy store. Of course, it happens! I used to do it. It only took one troublesome trip to the dentist to learn that spending all of my allowance at the candy store was not as sweet as I thought!
  • Make getting an allowance a big deal! I used to look forward to my allowance every Friday. When Grandpa, got paid, I got paid! It was a celebratory event. He’d check my grades at the end of the week and I’d receive my paycheck.
  • Throw in a challenge! When your children manage their money properly or do some outstanding money feat like give to a charity or save for a goal, give them a raise!

Helping your children learn about budgeting and saving may predispose them to take control of their financial future. They are going to learn about money at some point in their lives anyway. As long as they are in your care, you can sit down with them and discuss their spending behavior and money management skills. An allowance today might reduce costly mistakes in the future.

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Princess Clark-Wendel – who has written posts on CashNetUSA Blog.


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6 comments

  1. Posted by Barbara Smith, at Reply

    Just a heads-up, there are websites online that can be used to help kids manage their allowances. One that comes to mind is KidsCash (www.kidsca.sh) because the child earns points every time a transaction of real money is made, whether it’s saved, spent, or donated. The points work as an additional incentive. When the money is spent, it’s through the store website, which is full of toys and games, all of which are age-appropriate, so that parents don’t have to worry about what their kids are buying. There are also settings that would require the parent to approve every transaction that the child makes. I think you’d really find it interesting!

  2. Posted by Hershelle Clark, at Reply

    Our mom gives us an allowance. We get it when we complete our work on time, get good grades and help without asking. Sometimes she calls it rewards when we do good things like volunteering.

  3. Posted by FamZoo.com, at Reply

    Here are 17 more online resources that can help lower the bar for parents to be effective money mentors: https://list.ly/list/oD

  4. Pingback: Parents: Do you give your kids an allowance? | Live Life Worry Free Blog

  5. Posted by ZLS Publishing.com, at Reply

    Nope, I do not give my child an allowance. I never gave it much thought as to why I don’t, I just don’t but after reading this and thinking about it, I don’t believe I should be paying kids to do what they will one day. Unless you become a housekeeper nobody is going to pay you to keep your house clean. They need to get use to keeping their house clean without expectation of someone paying them one day. Good article, very thoughtful.

  6. Posted by Dirk Simmons, at Reply

    Love reading your newsletters Princess and discovering posts like this one. We were just talking about giving our daughter an allowance. Sure we will use these tips to help us figure out another money phase in our lives.