About Allowances


If you have children, I suspect you have toyed with if not already instituted an allowance policy to help them learn about money. This is a good thing to do to help them get exposed to finances and what it means to have, save, and spend money. I'm curious about one thing, how does an allowance help teach your kids where money comes from as an adult?


Whether you are a one or, more commonly today, a two-income household with both parents working, the income you bring in is not "allowed" to you. You trade your valuable labor, knowledge, experience, and other skills for money from your employer. There is an innate dignity in this exchange. Your employer shows you and your skills are worthwhile by giving you money in trade. You show your employer dignity by trading your labor with them and not any of the competitors out there.


Do your children get the same message when they are given money just for existing? Or is a different message being sent, albeit inadvertently?


I agree we should be teaching our children more about money and how to manage it. As with many things, this education begins at home. Personally, I pay my children to do chores. Then, we take them to the bank to deposit some of their earnings to build a habit of saving. After that, they get to spend their money on what they want.


Perhaps, as a part of this new year, it is time to re-evaluate what and how you are teaching your children about money. I encourage you to move away from an allowance and move toward showing them that money comes from work. This way, your kids should be more prepared for the reality of work that awaits them as adults.