Should you give your child allowance? I believe that every parent should at least consider giving their child allowance. Children need to learn the value of money and giving them allowance is the perfect way to teach them. The more practice they can have with handling money, the more prepared they will be in the real world when they have to make their own financial decisions.
Michelle Singletary, a nationally syndicated personal finance columnist for The Washington Post, believes that allowances aren’t necessary when teaching your child about the value of money. She argues that there aren’t any studies that show conclusively that giving your child an allowance significantly improves the chances of being a better money manager, compared to not giving them an allowance. However, that’s the only argument she provided other than saying she learned the value of money as a child without an allowance. The problem with that argument is that she is only one person and she can’t speak for every other kid who didn’t receive an allowance.
On the other hand, John Lanza, author of the children’s book, “Joe the Monkey Learns to Share”, argues that children SHOULD be given allowances. He believes that teaching children good money habits that last a lifetime requires them to actually have experience with handling money. He also argues that allowance money gives your child hands-on experience with financial transactions. On top of this, Lanza believes that allowance shouldn’t be tied to chores because the purpose of giving an allowance is to teach your child about money management. I disagree with Lanza in this area. If a parent just gave their kid allowance for free, they might adopt the attitude of laziness because they will think that money comes for free. Allowance should correspond with chores because then your child will learn about the relationship between money and hard work.
However, both Singletary and Lanza agree that if you give your child an allowance, there should be some rules that come with it. Singletary and Lanza both say that you have to teach your child about delayed gratification by forcing them to have to save up for something they want. Lanza states that giving your child “money power” means giving them “money responsibility.” This means that they now have to pay for things with their own money. This means that if they want that drink, they’ll have to pay for it with their allowance. This system works because if your child spends all of his/her money before his next allowance, and he sees something that he wants, he won’t be able to get it until the next he/she gets more money. Eventually this will teach him/her to save for something that they really want. This will teach them not to spend all of their allowance on something that they don’t really need.
I agree with John Lanza regarding allowance. Allowance should be given to your children, and chores or behavior should not be related to it. On the other hand, I agree with both Singletary and Lanza regarding the rules that come with allowance. Your child should be responsible to pay for things that he/she wants without the parent having to pitch in. Your child should also have a plan to save money to buy something special such as a skateboard of a computer. Money management is an important lesson to teach your children, and what better way than actually giving them experience with handling money?