Notes on Parenting

Insights for parenting babies, toddlers, teens, and young adults.

Monday, February 8, 2010

Allowance: Good or Bad?

There is much debate about giving children an allowance and whether or not it is really a good thing. Most researchers say that it is good and that it teaches children although, there is some debate on how much an allowance actually teaches children.

Money experts often say that giving children an allowance teaches financial responsibility at an early age. As children are given their own money, they are more careful and cautious about how they spend it.

However in the article, Giving Children an Allowance, they reported on a recent survey which found that " teens spend more than $80 billion a year, of which the majority has been funded by parental allowances, fewer than half know the basics about credit, checking, savings accounts, or auto insurance" (Crown Financial Ministries). This would indicate that perhaps having an allowance is not teaching children to be financially savvy. It would seem that there is more involved in children learning financial responsibility than just an allowance.

The article, Giving Children an Allowance, goes on to say that giving your child an allowance is only beneficial when you teach the child about financial responsibility in conjunction with the allowance. There is much research that supports this idea that giving your child an allowance is a good thing as long as the child understands what it means to be financially responsible and why it is important.

What do you think about this. Should we give our children an allowance? Is it really beneficial for them? Let us know what you think.



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