Many parents struggle with teaching their kids about money because they don’t feel confident about the financial side of life as it is. There are some households who immediately feel an allowance is the right answer. They want to ensure their kids get a weekly allowance based on a list of chores that have to be completed. Then there are other households who feel chores should be a part of the kids’ day to day life because they need to be taught responsibilities. There is no correct answer when it comes to providing your own kid an allowance or not, it’s all about what works best in your household to go along with your views on this subject.
With that being said, if you are debating giving your kids an allowance then this article will help guide you forward with learning more about what kids learn from an allowance and perhaps sway you to realize an allowance can be a good learning experience for kids.
Kids Start Understanding Business
When you give your kids an allowance they can start to comprehend how a business works. They have a list of responsibilities, that could be determined by their skill level and in turn, they earn some privileges – like allowance. If they don’t complete their responsibilities, then they don’t get paid and this can teach an important concept of how business and jobs work in the real world.
Kids Learn Budgeting Skills
Often times an allowance given to a kid isn’t a huge sum of money. The monetary value of an allowance may depend on the kid’s age, level of chores to be completed and what the household budget can afford to give. With that being said, regardless of how much your kids get for a weekly allowance, they eventually learn to budget for things they want and as they get older, budget for their needs too.
Kids Learn to Spend Money
An allowance helps kids have a visual way to learn how to spend money. As your kids earn their weekly allowance and start to create lists of things they want or need, their comprehension of how money works and how quickly it can be gone starts to improve. When an improved concept of spending money arrives, kids start to learn the skills necessary to be financially savvy.
Kids Learn to Save Money
Lastly, if you enforce the rule that kids have to save a portion of their weekly allowance you are then teaching them about saving vs spending. Using an allowance to teach the concept of saving and spending will ultimately lead your kids forward to be financially intelligent as adults. You can usually set up a kid savings account with $10 and in turn, it gives them a deeper understanding of money.
These are just a few things kids learn from getting an allowance. While you may still feel kids shouldn’t be paid for everyday tasks, perhaps you can create a chore list based upon extra chore ideas that don’t necessarily fit the regular everyday responsibilities every human should have. Homey app for chores and allowance will enable you to make a clear distinction between responsibilities and jobs. Using an allowance to help encourage kids to be financially savvy is a brilliant idea and could benefit them forever.
About the Author – Brandy Ellen Tanner is a Positive Lifestyle blogger who works from home while raising her 3 children. Learn more about Brandy at BrandyEllen.com and read her other parenting articles at ParentInfluence.com.Tags: allowance, banking for kids, financial literacy