Have you been considering an allowance for your child? Is he begging you for one?
Allowances can provide great lifelong financial lessons as they give children an opportunity to learn how to earn and handle money. An allowance also teaches them how to prioritize spending decisions as well as how to save and give to others. It is easier to make a financial mistake early on when daily living expenses aren’t hanging in the balance. An allowance may also limit how often he or she asks you for money!
Allowances can be tied to specific chores, which teach your child that hard work and earning money go hand-in-hand. An allowance also may help motivate your child to work a bit harder and quicker on those chores. Some families pay for chores above the normal household responsibilities that are part of a family working together.
Allowances also can be given “just because” or based on behavior. However, neither is recommended as that practice convey the idea that money is just handed out or dependent on just being good.
When it comes to setting an allowance for your child, only you can decide how much to give and how often, and whether you’ll require a certain amount for spending, saving or giving.
Of course, don’t put your own financial security at risk by overpaying your child. And if the allowance is successful for your child, you might consider giving yourself an allowance for your favorite way to splurge!