Allowances teach children, adults about personal finance

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By Roxie Rodgers Dinstel

Allowances are a great way to teach children how to handle money. Give them a certain amount of money each month to spend, save and give. That allows children to learn techniques that are necessary in controlling money before they are faced with making ends meet when the stakes are higher. They will learn about finances, responsibility and the consequences of making the wrong decision on money.

If the allowance is tied to chores, it also teaches the relationship between work and earning money as well as motivates kids to get their chores done. It also gives them spending money to buy their own items rather than always asking you for money. In addition, it gives them control over what they spend money on.

There are some disadvantages as well. Paying for chores gives kids the idea that everything they do around the house comes with a paycheck. Although it may seem counterintuitive, the research tells us kids who receive an allowance tend to be less fixated on money in general.

By considering both the pros and the cons, you may choose to give your kids an allowance to teach your kids about money. But an allowance may not be just for kids anymore. Sometimes for the same reasons we give kids an allowance, we also should give some adults allowances. This is a good idea for individuals who can’t seem to control what they are spending on or they continually overspend.

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