As a parent you want to teach your children to be financially responsible. Knowing the value of money and the responsibility that comes with it, are key lessons for adulthood.
One of the best ways to tech children about finances, is to give them an allowance.
5 Reasons To Give Kids An Allowance
Teaches them how to budget. One of the best things about giving your children an allowance, is that you can then require them to put money into savings, as well as pay for some things themselves. Even if it is just $5 to take to the local dollar store, they will learn about sales tax, and how they need to prepare for unexpected expenses. If they run out of money, they can’t spend – easy as that. With some education and frugal common sense, they’ll know how unwise it is to rack up a 5-figure credit card.
Helps give them a good work ethic. If you require your children to work for their allowance by doing chores, they will soon learn how much it takes to earn money. It helps them to understand that hard work has rewards, and how to appreciate the value of a dollar, even at a young age.
Teaches them fiscal responsibility. In learning how to budget, they will see how far a dollar goes. This will help them to be more responsible with their spending, as they get older. If they learn early that money doesn’t grow on trees, and that the dollar doesn’t go very far – they will be more responsible with their paychecks as they get older. Teaching them to truly understand the value of their money will give them a great base of fiscal responsibility when they are older.
Helps them understand what it takes to run a home. Many children simply don’t understand how much money you spend on basic things like food, utilities and even their toys. By giving them an allowance and showing them how far it will go, you can also share with them about other things in the house and how much they cost. Buying groceries and showing them how many allowances it would take to feed the family for a week can be eye opening for a child.
Shows them their effort in the family is appreciated. Sometimes kids feel like all they do is clean up and help around the house without thanks. While we as parents know that isn’t true, it can be tough to convince your children. When you give them an allowance for going the extra mile and helping out with extra chores around the house you are showing them how you value them and their hard work. Just like you appreciate the bonus your boss gives you to show you their appreciation, an allowance can do the same for your child.
There are many reasons to give your kids an allowance, but these are the ones that we feel are most beneficial in the long run. An allowance should never be something that is given, just because. An allowance should be earned by your child in an effort to teach them responsibility and the value of money.
If you are unsure of how to introduce chores to your child, check out my tips at the link, with suggested chores for all age groups.
Do your kids get an allowance?