Depending on your family background, you probably already have some thoughts and opinions on the topic of children’s allowances. In this post, we’ll explore some of the advantages and disadvantages.
Give Kids a Flat Rate Allowance
The flat allowance is a sum of money that parents give to their kids each week or month. The amount is set, and the child is not asked to do anything in return for the payment.
Reasons to Give a Flat Rate Allowance
It teaches kids to manage money.
Those who support the idea of giving an allowance typically do so to teach their kids to manage money.
The theory is that when you have money, you get practice and experience managing money.
It teaches kids you shouldn’t help people just because you expect something in return.
There is the possibility that if you do give a child a job to do around the house for an allowance, then you’ll teach your kid only to be motivated to work or help when there is a financial reward involved.
“Junior, can you bring me the dirty clothes from upstairs?”
“Sure, mom, but how much will you pay me?”
It teaches kids about unconditional love and acceptance.
Some families want to reinforce the idea that when one member of the family is blessed, it impacts all members of the family. Thus, dad’s or mom’s paycheck is distributed amongst all family members simply because that’s what it means to be part of the family.
We teach our kids that they are included because they are family, not because of how they perform.
Give a Chores-Based Allowance
The chores-based allowance is a sum of money that parents give to their kids each week or month. The amount is paid only when a child has properly completed an assigned task or job.
Reasons to Give a Chores-Based Allowance
It enforces the relationship between earning and working.
Some who don’t support the idea of giving an allowance think that what it really teaches kids is they get something for nothing. By nothing, I mean the money is not given in exchange for work. It is important for kids to learn the value of working. Thus, the only thing that a kid might learn is that benevolent people will willingly give you money when you need it.
It teaches kids to manage their own money.
In the corporate world, people typically manage their own money differently than the company’s money. The fact is, we manage others’ money differently than we manage our own. It is possible that by giving an allowance, our kids will never really learn to actually manage the money until they have a vested interest in their allowance. This is why a summer business for older teens is such a good idea.
It establishes a firmer giving foundation.
Similar to the previous point, it is entirely possible that giving someone else’s money is very different than giving your own. When you teach children to give you want them to learn to give part of themselves because the giving becomes more real.
As you can see, each system clearly has its advantages and disadvantages. Likely, the factor that will most significantly impact your decisions will be your own background.
In our home we do a chores-based allowance system. Our two oldest kids have a small job. When they complete their job, they get paid. However, in order to balance things, we also give (non-compensated) jobs to our kids. My son helps with breakfast dishes and my older daughter helps with lunch dishes. They have jobs like cleaning their room and picking up the living room before supper.
As such, we’ve tried as best as possible to enjoy the benefits of chores-based allowances without succumbing to the dangers of them.
Only time will tell if this was an effective strategy.
Can you think of any more advantages of either chores-based allowances or flat allowances? Do you give your kids any sort of allowance?
Photo By BEST PHOTO
Ready to Quit Living Paycheck-to-Paycheck?
Just click to join 163,000+ others and take our FREE email course to better manage your money, pay off debt, and save!