Do
your children earn an allowance for helping around the house (doing chores)? If
not, then listen up because they should be.
During
my more than 20 years as a Certified Financial Planner, I’ve heard plenty of
reasons why a parent doesn’t want to pay an allowance for kids doing chores. Just
none of them make sense if you are looking at the deeper meaning behind paying
an allowance.
We
all need motivation to get things done, and for the majority of adults, the
greatest motivator is MONEY. And, despite what the “non-allowance” camp wants
to say, MONEY is what motivates kids for the long haul too! That’s right, money!
Not stickers, not points, not electronic monsters and not extra TV time.
Eventually
everything comes back to money, so why shouldn’t we raise our kids to
understand and appreciate what they will come to find out anyway? The earlier
in life they realize and appreciate it, the faster they can learn the things
they will need to know to make good financial decisions as adults.
According
to a recent survey of more than 1,000 parents by The American Institute of
Certified Public Accountants, 70 percent say they provide their kids a weekly
allowance. Nearly 60% of these parents do so because their kids do chores
around the house.
There
is a great divide in this country when it comes to allowance. No matter which camp
you belong to, this can’t be denied - paying a child an allowance for hard work
will provide hands-on experience in earning, saving, sharing and spending. All
valuable lessons they will need later as adults!
So,
if you aren’t paying your child an allowance for helping around the house,
where do your children learn these lessons? Certainly not at school! Here are
some things I would like for you to consider when it comes to paying your
children for helping around the house:
1. Pay On Your Terms!
It
doesn’t matter whether a parent gives an allowance for chores that are
completed daily, weekly, monthly, or that go above being part of the family. Ideally,
every week is best, but the key is to provide an allowance and drive home the
many lessons associated with earning.
2. Deduct For Bad
Behavior
How
many times have you walked through a store and heard a parent bribing a child
to behave? Be honest, we’ve all done it. However, maybe more effective is to
deduct money from a weekly allowance for bad behavior. Kids learn early the
spending power of money, as well as the fact the less they have, the less they
can buy. Don’t bribe when you can deduct!
3. Start Young For
More Experience
I
believe two things are basically true when it comes to kids: 1) If they are old
enough to make a mess, they are old enough to clean it; and 2) The younger our
kids have something drilled into them, the better it sticks. Whether it’s an
instrument, a sport or allowance, the same holds true. The earlier we implement
these things, the stronger the foundation.
4. Let Your Kids Make
Decisions
Once
your kids have earned some money, let them make decisions on how to save, share
and spend it. When your children begin to drive, you just don’t let them go out
for the first time without you sitting in the passenger seat, do you? It’s very
important for our kids to gain experience earning and managing money before we
let them go out on their own. It’s ok to be their safety net but there are many
valuable lessons to be learned by letting them use their hard earned money.
5. Invest, Invest,
Invest
When
you give your kids an allowance, you should make them invest at least some of
it. A few years ago a survey showed that a majority of Millennials (age 18-34)
don’t invest their money because they don’t understand how investments work.
Teaching kids about investments from an early age will have them ready for when
the time is right. If your investment skills are subpar, learn it together.
6. Don’t Quit
Parenting
is about give & take, on & off and starting over. With that said, there
will be a time when you’ll want to quit paying allowance and doing all the
other things I’ve suggested. Please don't! With our kids learning little to
nothing about personal finance at school, it’s up to you to provide them with
the background, insight and hands-on experience they will need to confront the
millions of financial decisions waiting for them as adults. Without you, it
could be a bumpy ride.
from Gregg Murset,
CEO of BusyKid
i had to earn my allowance and so did my kids,,they got nothing for free,had to earn it just like i did
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