I’m a big believer in teaching kids how to manage money, and I think setting up an allowance for kids might be the single best tool you can give them to help them learn basic financial skills. I started giving my kids a share of the family war chest at an early age; as a matter of fact, as soon as those little heathens became old enough to start asking me to buy them stuff, I figured they were old enough to start getting regular allowance money. It’s truly amazing how quickly kids will shorten that list of stuff that they “just have to have” when they are forking over their own little sacks of coins to pay for it.
If you wait too long, you may be in for some frustrating times trying to re-program the insides of your kids heads. After those minds have had years to soak up some of the ridiculous notions our culture spews out about money, it might not be so easy to squeeze that information out and replace it with the right stuff.
Something I would caution against though, is making a kid’s allowance a ‘payment’ for household chores. In my opinion, chores like basic housekeeping and yard work are something everyone in the family pitches in on because they are part of the family unit. Everybody shares the space, so everybody helps to maintain the space.
Okay, so maybe you can see the benefits of giving an allowance; but how much should you give? How much money does it take to make an impact on your kids’ financial learning? How much is too much?
I started letting my kids have some of their own money once they were old enough to know not to eat it. As they got older, the amount of money and the limits of what they were allowed to do with it grew. It’s an amazing thing to watch when a kid will opt out of blowing mindless cash so that they can save up for a pair of Air Jordans. Not only that, but those shoes take on a whole new level of value once that kid has shelled out his own hard-saved coin to pay for it.
Overall, I think that setting up an allowance for kids is not just a good idea; it’s something that you really should do. Think of it as a big tool that you are giving your kids in order to teach them how to manage money. And proper money management and financial responsibility are some of the best skills you could ever send your kids out into the world with. But of course, the responsibility starts with you -the parent or guardian. You are still the boss, and you should still set the limits on how, where and why that money is spent based on your overall parenting values (you do have these, right?).
Allowances for kids