Should you give your children an allowance? I do.
For small children who can’t make a lot of money, an allowance gives them a sense of autonomy and choice. I use the allowance to divert my daughter’s “I wants”. Instead of buying items for her, when I do not feel like the item is necessary I suggest that she get it with her allowance money.
For older children, there are a number of questions to consider when you begin to give an allowance. What constraints will you put on what is purchased with the allowance? While we might hope that our children will purchase items that fit our own ethics and aesthetics, the reality is usually a far cry from that. How will you deal with differences? Do house rules still apply to allowance money, or are your children allowed more freedom with their spending money?
For teenagers, an allowance partly depends on what you’re willing to pay for. It also depends on your attitude towards jobs for teens. As a teen, I had part time jobs to supplement my allowance, but I also got an allowance. An allowance challenges the parent to decide what to buy and what not to buy for a teen. Do you have a clothing budget for basics, then give your teen an allowance that can be spent on additions to that clothing budget? Does your teen have hobbies or a lot of extracurricular activities? How much will you support these financially? How much will you support them through your regular budget? Should your teen get a job to pay for some of their discretionary spending? What is discretionary?
The allowance brings many questions into the home, but it’s also a good tool for teaching basic financial education to kids. While children can model off their parents’ financial management, having money allows them to learn how to save, how to give, and how to spend wisely.