Does giving a child an allowance help him learn how to manage money when he becomes an adult? I believe it does.
If a child doesn’t receive an allowance and learn the value of money, I believe he will become a poor manager of his income when he becomes an adult.
Many parents don’t think about teaching their kids about money until they are about to leave for college. I think that is too late.
If you give your kids an allowance, they will begin to learn how to manage money. They will make mistakes, but at least you are there to guide them down the correct path.
Giving them an allowance will also help them to stop and think about how they want to spend their money. They will soon catch on that once the money is gone, it’s gone.
I have definitely noticed that my kids have a greater appreciation for things they purchase with their own money.
I think kids as young as four can begin to learn how to manage money. That’s also a good time to start teaching coins and their values.
Some suggest paying them an amount equal to their age each week. That would mean $6 a week for a 6 year old (or $24 per month). If that is too much, figure out an amount that works best for your situation.
The goal is to teach your child that money has value and how to manage it.
As they get older, create a list of items they will be expected to pay for themselves. This can mean money for clothes, movies, entertainment, etc.
My kids earn their allowances by doing specific chores on a regular basis. However, there are chores that my kids are required to perform that are not tied to an allowance. They are also able to earn extra money by performing extra chores.
Some people don’t think that allowances should be tied to chores, but I believe it gets them into the mindset of earning their pay. When they become adults, no one is going to just give them money. They will have to go to work to earn their paycheck.
We also use the 80-10-10 rule where they are required to give 10% to charity, save 10% and the remaining 80% is theirs to spend.
What are your thoughts on kids receiving allowances? How do you manage their spending? Are their allowances tied to chores? Let me know in the comments below!