Money Talks: Should Your Child Have An Allowance?
There are many benefits to children receiving an allowance. For example, it will help children to think more carefully about their purchases. They may have their hearts set on the latest Nintendo Wii game but understand that it will take saving their money to earn it. Learning how to budget and save at an early age is a valuable lesson.
Parents can also help children open a savings account, which is a great way to teach the importance of setting money aside and not immediately spending it all. Suddenly, a child will begin to distinguish between needs and wants, which can really help them through their teenage years and into adulthood.Here are some other benefits to receiving an allowance:
- Teaches responsibility;
- Teaches consequences if they foolishly spend their money or lose it;
- Appreciate and learn the value of money;
- Learn to work for the things that they want; and
- Understand importance of saving and budgeting.
With any decision you make as a parent, there will be a few downsides. Allowance may become a battle if your child is not satisfied with the amount they receive or how long it takes before they earn enough to get what they want. Allowance can be lost and children may end up spending their money on things that parents don't agree with.