Allowances: teaching children about money?

All parents want to teach their children about money, but money without work fails to teach responsibility.

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Allowances: teaching children about money?

Parents always want the best for their children. Some, however, go a little bit too far in seeking this. It has been determined by studies that the average allowance for children is just shy of $75 a month—and that in most cases the children do no chores outside the routine making of their bed and cleaning their room. Parents justify this by saying they make their children buy their own clothes and school supplies and leisure, so in the end the child is no better nor worse off (financially) with this allowance than without it.

Unfortunately, this is not the case. If a child sees that no work is required to get his $75/month he is not very likely to carry much concern for the meaning of money. What the parents are doing, in effect, is handing him spending money and necessities money on a silver platter. If a child gets used to this, it may have serious implications on his habits in later life. People who are used to money without work often develop laziness and get very frustrated when things don't always go their way. Not only is being given money for not working a bad idea in this sense, it is also a bad idea from a more common-sense perspective: it teaches children poor fiscal responsibility.

If a child goes out and gets a summer job, he knows that he must budget. Aside from that, he must also put some into savings for college, a car, etc. Since he is working for it, he realizes the value of money and the fact that it doesn't grow on trees nor is it to be taken too lightly. With this in mind, he tends to be very frugal. People who get allowances with no work required think of it as Mother or Daddy's money and are more likely to throw it around and not be financially wise.

People who get allowances but must work for them (washing clothes and dishes, cutting grass, raking, cleaning around the house, etc.) tend to deal with their allowance money as they would paychecks from an actual business—they are frugal and less likely to take the money for granted. Both now and in the future they will exercise more sound fiscal responsibility and, as has been said, this affects them socially too (patience, caution, etc.).

In the end, no matter how much you love your children or how much you want to make things easier for them than you had it, the fact remains that giving them everything on a silver platter teaches them poor financial responsibility. Better to pay them, say $100 a month, for doing work than even $25 for not.

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