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Allowances: Teach Your Child Financial Responsibility

by Rosanne Lorraine | October 28th, 2008 | Elementary

Teaching kids about financial responsibility has never been more important. It is an essential lesson they need to learn at an early age to avoid financial problems in the future. Today’s consumerist lifestyle isn’t healthy because people are spending more than they can afford. What does that teach the kids? Obviously, it is creating the perception that having debt is fine.

Give your Kid an Allowance

Surveys reveal that a lot of parents are giving their kids regular allowances. The allowance will help teach the value of saving, spending, and budgeting. However, before you decide on this, you should first consider whether you should give the allowance without conditions or whether there should be specific duties attached to it.

There are experts who recommend that basic responsibilities, such as making their own beds and putting dishes, in the sink don’t deserve an allowance. It is simply a duty as part of the family. But household chores, such as cleaning the garage, deserve an allowance. These chores also go beyond the usual responsibilities, so it will provide kids with the concept of how work can be rewarded. An important aspect of giving an allowance is for them to learn that money comes from hard work, and they should spend it wisely.

Allowances also can be used as a tool to teach other values. For example, asking them to deposit a certain percentage each month introduces them to the concept of long-term planning. And having them set a portion to donate to charity teaches them the value of compassion for others. The value of delayed gratification and patience also can be tested. This can be seen if they pass up on junk food, clothes, and shoes when they’re saving for something more expensive.

  1. feefifoto says:

    I prefer to pay my kids for doing jobs around the house — not for things like good grades but for cleaning the garage or mopping the floor. I don’t want to pay them just to exist and I also don’t want to have to argue about withholding or docking allowances in case of the occasional transgression.

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