An allowance is a great way to teach kids the concept of money. Kids enjoy making their own money and feeling like they are a part of the family. With each chore that gets assigned your kid feels proud that they are finishing a task and going to be paid for that task completion. Paying an allowance helps to build confidence, responsibility and financial education for your kids. Sometimes the budget can get tight and we neglect to pay our kids their allowance on time, which is not a good practice to get into. Here are a few reasons why it’s important to pay allowance to your kids on time.
Paying Same Amount Weekly
When you pay your kids an allowance the same amount on a weekly basis it’s teaches them real world money management tips. Your kids learn to anticipate how much they will receive by the end of the week so that they can plan for saving towards something they want or head to the store to purchase something they have been working all week to earn enough money for. This is much like how money works in the real world which allows your kids to learn better money management skills.
Setup a Bank Account
When you feel that your kids are old enough you can actually set them up with their own bank account. Have your kids go with you and then return home to setup online banking. With online banking you can have your accounts set up to do a transfer of funds from your account into each kids account weekly. You can even use Homey app to automatically transfer allowance once all the responsibilities are done. Have your kids walk through this process with you and log in each week to have them review their funds. This helps teach kids about banking and in turn teaches them about real world auto deposit of funds, which most companies now do to pay their employees.
Builds Trust and Confidence
When you pay your kids allowance on time, it helps build their confidence and trust in you. They will soon realize that each task they do during the week will ultimately have a reward at the end of the week. When you miss an allowance payment, kids tend to lose their motivation because they don’t know whether you will pay them on time or not. Paying your kids an allowance on time will ensure they stay motivated to work for their money and trust you to pay them in a timely fashion as you all agreed upon.
Just like any employer in the corporate world must pay its employees on time, you are the parent who has employed their kids to do set tasks each week in exchange for a weekly allowance. Paying your kids their allowance on time allows you to show them that it’s important to stick to your word with agreements. Here’s a tip on what to do if your budget really doesn’t afford you to pay the set allowance: sit down with your kids, let them know what is going on (keep the conversation age appropriate), what the next steps are, and either renegotiate the allowance amount for the time until the funds allow the original amount again, or set up a contract, so the kids know they’ll get paid at a later time – simply try to stick to what you would expect from your employer if they couldn’t make pay. When kids are paid an allowance on time, they learn responsibility, real world money management skills and trust in others.