Allowance Pros and Cons
April 30, 2019 | by savannah traywick
As kids age, there is a natural point where they will start learning the importance of money - its value in the real world, thus wanting some
Allowance Pros and Cons
April 30, 2019 | by savannah traywick
As kids age, there is a natural point where they will start learning the importance of money - its value in the real world, thus wanting some of it. Kids may see mom and dad buying things for them or for themselves; this is the perfect opportunity to explain money and its importance.
The amount of an allowance may be different based on the age of the child, their needs, and how the parents see fit to reward them; but it is important to teach wisdom and saving when it comes to money early on.
The idea of an “allowance” is often different from home to home. With that in mind, here are three ways to talk about an allowance, and the pros and cons of different options.
3 Allowance Options
1. “Free” allowance: This allowance is an amount of money given to your child weekly, biweekly, or monthly that does not change and requires nothing in return. This allowance is positive because it can be a simple starting point when first teaching financial wisdom. A negative is they may not see the benefit of work and reward, but that can always come later. This may be better for a younger kiddo that would buy cheaper things but still wants money of their own.
2. “Ask” allowance: This allowance is when your child does not receive a regular allowance, may participate in household duties, but asks occasionally for money on a specific occasion. A good example of this is if they wanted to go to the movies with their friends. Lets pretend regular chores are done, homework is finished, and it’s not too late. This is a great opportunity to let their ask be rewarded with $10 for the movies. A positive aspect is that it can be a lighter version of the reward system and can spur on accumulative good behavior for a bigger reward. A negative aspect is that these asks may become too frequent. This can be handled by setting up clear expectations and time limits on how often or how much they can ask for.
3. “Work & Reward” allowance: This allowance is when kids do chores or tasks to earn money. This can be extra, simple things for a teen, like, vacuuming, doing the dishes, helping more with laundry, shoveling snow or mowing the yard. This is positive because early on it can teach how money comes when you work for it, and is a great example of what it will be like when they get a real job. This can be negative because it may be hard to distinguish what is done for money and what is expected just for living in the home. It is important to clearly delineate between which tasks are expected as a contributing member of the family versus bonus, allowance-earning tasks.
Every household will be different. It is important to recognize differences in ages, personalities, willingness to help, and schedules that can change these types of allowances. Being flexible and willing to have open conversations with them is crucial to making any allowance work.
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