Is Giving Your Kids An Allowance A Bad Idea? [Poll]
Teaching your kids about the value of money is important, but what is the best way to do it?
One popular way is to give kids an allowance, but the experts disagree on whether or not an allowance is a good idea.
Do you think an allowance is a good way to teach kids about money?
Every family and child is different when it comes to money. Take a look at some ideas below, then let us know what you think.
Should an allowance be tied to chores or given with no conditions?
Some experts think that it’s important to make this connection so that kids learn the relationship between work and pay. Others say that kids should have a responsibility to help with housework, above and beyond any financial incentive.
The great allowance debate roars on, and may have moved to a whole new level with a personal-finance scholar’s recent assertion that a “regular, unconditional allowance may be akin to cruelty to children.”
As a teaching tool, allowance isn’t just ineffective — it’s detrimental. So says Lewis Mandell, professor emeritus of finance and managerial economics at SUNY Buffalo.
What age to begin?
No particular age is best for every kid, but consider starting an allowance by the time a child is 10 years old. By then, most kids have had experience making thoughtful spending decisions but still look to parents for guidance.
Kindergarten or first grade is the right time to start an allowance. By this time, your child may have a school store to visit where he or she can buy pencils or other supplies. If not, chances are he or she will have plenty of exposure—through you—to other places to shop. Grocery stores, drug stores, dollar stores…all are full of things your child will be able to afford.
And, of course, there’s an app for managing your kids’ allowance.
I think whether or not an allowance is tied to chores should depend on the child’s understanding of money, which will increase with their age. A child should know the value of money and have an understanding of money management before they can appreciate earning money for chores.