Giving Your Kids an Allowance (Or Not)
All parents have different philosophies about allowances depending on their histories, values and attitudes toward money. Some require children to do regular chores for an allowance. Others believe all family members should do chores and that allowances should be unconditional—kids should receive part of the family’s income. Some don’t tie allowances to chores, but do pay for extra jobs, like cleaning the garage. Other parents don’t give allowances at all, but pass out money as children need it.
Whether you choose to give your children allowances or not, remember that they learn by observing. “The more conscious you are about what your behavior teaches children about money, the more effectively you’ll model good habits,” says Sharon Danes, professor and family economist, University of Minnesota, St. Paul. “If you’re not paying attention, you may be teaching them things you don’t want to.”
Remember that just having money doesn’t teach children how to manage it. Look for teachable moments to talk about spending, saving and charitable giving.
Here are some tips to start your child on the right track:
- Look for daily situations to teach your kids good spending habits. If they made a poor spending decision, discuss it with them and ask what they'd do differently next time.
- Let them track their own money as a way to learn life skills. If they lose or mis-spend it, let them learn by their mistakes.
- If your child asks for an advance on an allowance or wants to borrow money, don’t dismiss the idea. It may be an excellent chance to teach them about loans.
Perhaps the best way to teach good spending and savings habits is by starting them off with a savings plan of their own. Call 989-739-1401 to learn more about our Youth Savings and Certificates.Go to main navigation