Do you ever wonder whether you should be giving your children or grandchildren an allowance? This month we will explore whether this is a good idea in your family.
Back when I grew up none of my friends, including myself ever received an allowance. We grew up in a middle class mining family where money was tight. This made learning about money a bigger challenge. I was lucky because my father had a very good understanding of money. Now coming from a family of seven children, living in the same household, we all took different lessons from our environment. I feel very fortunate that a lot of my dad’s knowledge rubbed off on me. I should say I realized my dad’s wisdom by the time I hit my 20s.
What I have noticed over the last two plus decades of being in this business, is that baby boomers have learned the importance of how to save money at different times in their lives. Most of us just never had any money so we did not get to understand the value. When I finally started to earn money, I was spending it almost before I got it. The result? I had nothing to show for it. That’s when I realized something had to change.
So if you want to start teaching your children young about money, then they need to start earning some. When they are old enough to understand picking up their toys, they are old enough to start earning some allowance. The responsibility should increase with age but so would the allowance. This would teach them the valuable lesson of saving up for something they really want and not indulge every whim because you felt deprived as a child. Over the years I have heard it all and seen it all. I can assure you, the children you give valuable money lessons to usually have a better appreciation for what they spend their money on and when. They usually carry less debt as well.
So do you give your children an allowance or not. You ultimately have to make that decision, but consider this money well spent if you do. We have to learn to budget at every age. It is never too early to start.