Should Kids Get an Allowance
Today, I’m going to discuss whether it’s a good idea to give kids an allowance? First of all, I’m a kid and secondly, I love money. My answer is absolutely yes – it’s a great idea to give kids an allowance. What is an allowance? It’s money given to a child on a regular basis by a parent or a guardian. The money can be used to go towards something specific or left to the child to decide how they want to spend it. Research has shown that kids who learn about money management at an early age tend to be more successful as adults.
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Allowances give children the opportunity to practice math skills to learn about handling and managing money to understand saving and spending and to discover the basics of budgeting I am sure we have all seen kids kicking and screaming, begging their parents to buy them things at the store? If you haven’t, just walk into a Toys R Us on a Saturday. Kids know if they make a fuss and create a scene, there is a good chance they will get what they want. These are kids who don’t understand the value of money.
At what age should parents start giving their kids an allowance? Studies show, if you start at age 5 or 6, kids are old enough to understand the difference between want and need. They are also old enough to be taught how to keep their money in a safe place. Now the big question – how much allowance should a child receive? If it were up to me, I’d say $100 month. But, a common rule of thumb is giving 50? to $1. 00 per year of age. For example, a nine-year-old good-looking boy like me would receive $4. 50 to $9. 00 a week.
Just in case you’re wondering, I get $4. 50 a week. Before giving a child an allowance, parents and children should establish some ground rules. For example, a written agreement is a good way to start. Parents can state how much they are going to give their child and at what intervals (ie. weekly, biweekly or monthly). A little tip for parents, give allowances on a Sunday rather than a Friday. This will prevent us from spending our allowance immediately. My parents and I came up with a formula for my allowance:
I invest 30% and keep that aside for University (just incase I don’t get a scholarship for swimming). I save 30% for short term goals (like a Nintendo DS game) I spend 30% on whatever I like The final 10% goes towards a charity of my choice Some of us kids are going to buy silly things with our money. As parents, you have to let us make mistakes and learn from them. After all, making mistakes now with small amounts of money is much better than if we were to make similar mistakes when we’re older. Some parents may say, “we can’t afford to give an allowance to our kids”.
To those parents, I ask 2 simple questions: 1. Do you currently buy toys, hockey cards or even candy or popcorn at the skating rink for your kids? 2. How much do you think you spend weekly on these types of things? You’ll be surprised how much you’re currently giving to your kids without even knowing it. Plus, if you continue to buy things for us, you’re not teaching us anything. An allowance gives us an opportunity for hands-on experience to fully understand the value of money. So, is it a good idea to give kids an allowance? My money says yes.