Are you like most parents who give an allowance for doing chores around the house? Then, when the kids want something, you reach in your wallet and throw down the cash.
There are several different arguments out there for whether to give allowance or not.
I like the reward factor. It goes something like this. The kids take out the garbage, do the dishes, and clean their rooms. Their reward is $20. So, let’s think about this. We’ve encouraged “garbage man”, “kitchen dish washer”, and “house keeping” as behavior. Please don’t get me wrong. I’ve held all those jobs and have the utmost respect for anyone working hard in those jobs. They simply don’t reward the hard work with higher income.
I would prefer rewarding my children for money making ideas they have. I like to reward my children when they read books and write me a review of the book. What if you were to encourage them to create wealth through small neighborhood jobs? Encourage their creativity.
Ok, so we’ve established that they may be getting an allowance for chores. If they aren’t encouraged how to manage that money once they get it, now what. Do you cave in when they ask for more to buy their new gizmo or gadget? Do you give them extra when they go out with their friends or to put gas in the car?
If you bleed an extra $40 per week in addition to the $20 you already gave, that could really have a negative affect on your bottom line. Rather than $80 per month you’re really giving up $240, per month. Ouch.
Start teaching your kids the value of money by encouraging them to save. Put
10% in their contribution for the charity of their choice. Then put 40% in their savings to encourage the habit of saving and delayed gratification. Split the 40% in 2 so that 20% is not for spending and the other 20% is for short term goals, like new clothes, video games, or music. Then put the remaining 50% in their pocket for spending. If they get $20 per week, they will have saved $416 per year.
If you will stick to your guns and only give them $20 per week, you will save $2080 per year, per child. If you’ve got 2 or 3 kids, that could be your retirement savings annually.
Your kids are learning your financial habits. If you are their ATM when they need cash and don’t need to save, they will use credit when they get older. Teach them while they are young, and see if they don’t develop some smart money habits as they go off into adult life.
Allowance doesn’t have to be a curse. It can be a great blessing if you teach them well while you have them.
written by: Joshua Christensen
Bio: Joshua Christensen is committed to Faith, Integrity, Trustworthiness, Abundance & Boldness. Living life on purpose, he is a devoted Christian, Father and Friend. He is a Small business Owner running his own Southwest Funding Branch and a published author to “Consider the Ant: 3 Keys to Biblical Prosperity.”
Image courtesy of Stuart Miles / FreeDigitalPhotos.net