A new CreditCards.com poll found that 40% of parents pay their kids an allowance. They often think paying children an allowance teaches them how to “work for what they get in life.”
Most children earn their allowances doing chores like cleaning their rooms, washing dishes and taking out the trash. They normally get paid in cash every week for their work efforts. According to the CreditCards.com poll, the average pay out for kids under 18 is $4 a week. While the average age children start receiving an allowance is eight-years-old.
Teaching your kids to work for money could be a good lesson when you have the extra income to do so. But could there be a more valuable lesson on money that parents may not be teaching?
In the poll, they found “1 in 4 respondents said their parents gave them no education on money topics while they were growing up.” With money comes responsibility and if you fail to teach that lesson your child may just learn to spend, spend…
Sadly, our school systems don’t put any emphasis on teaching children how to manage money. Sure, they teach important concepts like how to count money or make change in math. But there are other essential money lessons that children need to learn early on.
As parents, whether you choose to pay your children an allowance or not, educate your children about money. When you share money lessons, it can help your children to be better money managers as adults.
Last week at lunch, I couldn’t help but to overhear a conversation in the booth behind me. A young woman was having lunch with an older couple. She was very frustrated about money. You could hear it in every word she spoke (and it wasn’t in a quiet whimpering voice either – she was emphatic).
In her life, she seemed to be learning about money through trial and error. Now she was trying to get her finances in order to buy a new car. However she was having a problem with her mate, who spent money like (and I quote her) “he had a hole in his pocket.” In other words, as soon as he got any money, he spent it all.
The older gentleman understood her frustration and said, “Saving money doesn’t come easy. A lot of people just spend everything they get and then live their whole life in debt.”
His statement was sad, but true. I wonder how different the “a lot of people” the man referenced lives would have been had they learned good money habits growing up.
Parents – Whether or not you choose to pay an allowance, please don’t miss the opportunity to teach your kids about money.
You can teach them simple money lessons like how to prioritize needs over wants, how to save for something big, and how to shop smart. Taking the time to teach kids about money can make a big difference. And remember when it comes to children, the best teacher of all is always the one who leads by example.
