3 Reasons to Start an Allowance for your Children
I want to believe that I’m not alone when I hope my kids will grow up and become good stewards of their finances. In generations past, parents hoped their kids would marry well, or just settle down with the right spouse. But times have changed. If you can bring your kid into the working world with little or no net, you have give them an invaluable gift.
For me, when my kids leave our nest that they know how to manage their money. I guess as a dad I get down to the basics, but it is important.
Think about your first few years of marriage, it can be a challenge to manage everything. I know it was for us. But I was raised on an allowance system. I knew the just enough about budgeting to make it all work (I think I can write 10 posts about this…)
Essentially I knew enough to be dangerous. Which I would not have learned had I not started out as a wide-eyed young boy living within my allowances.
Let’s start with the basics and go from there….
1. Make them Earn an Allowance.
This seems almost too basic to mention but it is actually the most important part. Don’t just give out money, make them earn it through chores or whatever you choose. I know some parents reward kids for certain accomplishments, and that’s cool by me. But either way, make them earn it!
2. Keep up Your End of the Bargain
If your kids are like mine, they are certainly used to my ways by now. If they think I’m not going to pay them on a regularly scheduled basis, why should they give a damn? This philosophy basically applies to all aspects of parenting, but follow through on what you’ll say you will do. Regardless if it is for rewards or punishment, they need to know you’re going to be straight with them.
3. Consider giving them “Cold Hard Cash”
It the world of Venmo and Zelle, this might seem antiquated but when a kid can hold cash in his hand it makes it real. A check is really no good, but it is better than nothing. They need to see the fruits of their labor. Let them touch it, play with it, who cares. Your goal is to get them engaged in the process and eventually buy in “whole hog.”
Post Script: I know that in today’s world there is an App for everything, and I have a ton myself that I’ve come to rely on virtually every day. So, while I’m a proponent of cash, there is certainly a place for technology.
You will know your kids better than anybody, what will resonate with them? If they live off a device, which my kids certainly do especially as teenagers then use that to your advantage. Find an app that is both easy and engaging for them to use as well as yourself.
To me this is a starting point, try doing this with your kids and then once you have a few weeks under your belt you can graduate to the next level, which would be socking it away in a bank account and teaching them about the power of compounded interest.
I know that sounds like a super fun convo with your kids, but let’s be honest there really isn’t much about banking that would get anybody super excited. Right?