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Allowances and Chores
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Learn the best way to set your child's allowance — and whether you should reward your child for helping out with household chores. |
Money Management Begins with an Allowance
Allowance Tips: Good Money Management Begins with an Allowance
Brought to you by the National PTA®.
The best tool parents have for teaching financial responsibility is an
allowance. Even very young children should have discretionary funds to spend as
they see fit. Saving, decision-making, planning, sharing, charity, and
responsibility are just some of the lessons that can be taught through an
allowance.
It's important to clarify that an allowance isn't money a child earns for doing
chores. Children should have age-appropriate tasks they're expected to do
without pay simply because they are members of a family.
An allowance is part of the parents' responsibility to meet the needs of the
family. The amount of the allowance depends on the child's age and the parents'
income. It should be adequate to meet the child's needs but not necessarily
every want. Perhaps the most important benefit of an allowance is learning to
develop independent thought. Expect children to do some unexpected things with
their money, but allow them to make their own mistakes. The important thing is
not to rescue them with more money. Help them work through their own solutions.
We suggest the following tips for teaching financial responsibility:
Teach philanthropy at an early age. A portion of a child's allowance — 10
percent — should be allocated to charity. Encourage children to participate in
canned good, clothing, or toy drives for charities. Help them to respond to
natural disasters, such as hurricanes or earthquakes, outside their community by
donating money to help.
Teach saving at an early age. It's important to put something aside for the
future. Teach your children that saving isn't for leftover money. Both the
allocations for charity and savings should be made before any discretionary
spending takes place. As with the donations to charity suggested above, the
child should be encouraged to set aside the same portion of allowance — 10
percent — for savings. Children should have savings accounts by the time they're
8 years old. If older children don't have savings accounts, remember it's never
too late to start a savings account for a child.
Encourage an entrepreneurial spirit. If children have a special goal, encourage
them to find ways to earn the necessary funds. Don't create unnecessary jobs
just so they can meet the goal. That's the same as giving them the money. Let
them find a job and make the offer. If it meets a need and the price is right,
hire them.
Never reward good behavior with tangible gifts. Goodness is its own reward. Your
approval and words of praise should be sufficient. Paying for good behavior
leaves parents open for juvenile blackmail. Parents don't want to hear, "I'll
stop crying if you take me to the toy store," or "I'll come home on time if you
buy me a new stereo."
Don't try to compensate your children for your own deprivation as a child. There
are some purchases that signify changes of lifestyle and qualify as rites of
passage. Allow your children the pleasure and pride that making those purchases
for themselves can bring.
Teaching children financial responsibility can be an exciting and fun-filled
experience. It's not always easy, but when parents are consistent, the rewards
are immeasurable. Parents will be giving their children skills that will benefit
them for the rest of their lives.
This article was excerpted from National PTA's magazine, Our Children.
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