Giving your child the responsibility of a monthly allowance is a big decision. There are a number of factors you need to consider such as age and amount and what they need to do to receive that allowance. Traditionally, parents who decide to provide an allowance must set upon a set amount and the frequency of the allowance. A lot of times that allowance is linked to simple tasks children complete around the house.
This concept behind giving your child a monthly allowance is to teach them valuable lessons on budgeting, saving, the value of money, and how to use money. The decision to do this, however, isn’t always an easy one, because money is very powerful, and when it lands in the wrong hands, it can end up doing more damage than good. It can also be a time consuming and stressful time for parents, as they must also help their child manage that money so they are benefitting from it beyond its monetary value.
In this review, we help you weigh the pros and cons of giving your child a monthly allowance. If the benefits for you outweigh the cons, then you should consider introducing this practice in your home. But if the cons outweigh the pros in your opinion, then it’s probably not a good idea for you at this particular time.
What Are The Benefits Of Giving Your Child A Monthly Allowance
It communicates to them the value of money
An allowance is a great way of teaching your kids how valuable money can be, as they are able to buy what they want with the money they get. As mentioned above, it is probably better if you attach the allowance to a chore they complete so they can also associate money with hard work. It also gives them a sense of responsibility. Whichever way you decide to give the allowance, please note that it has a huge impact on how your child sees the money.
It can be used to help kids make money-related decisions
As you all know, budgeting is mostly about making trade-offs. You have to decide whether you want the budgeting dinner, or the affordable one, or whether you should go for the expensive vacation or the more affordable one. When you put money in your child’s hands, they are all of a sudden faced with the challenges of decision making. Should they use their money to buy ice cream or wait till it has accumulated to buy the sports shoes they have been admiring all year or the game they have wanted all their lives? Decisions, decisions, and more decisions. This is actually a good thing. They shall learn how to prioritize.
It allows them to make mistakes and learn from their mistakes
You may think that this is a con, but it is actually a very big pro. Making financial mistakes is a very powerful learning tool. Mistakes are how we all learn. If your child spends all of their money on pizza or gives it to a friend, they will then end up not spending it on things that they actually need. When they miss out on that new outfit, or that new toy, because they misused their money, next time they shall be wise enough to delay gratification and only spend the money on their most important needs.
What Are The Cons Of Giving Your Child A Monthly Allowance
It may strain you financially
While most experts are big fans of giving an allowance, most parents operate on a budget, and setting aside the extra $50 or so dollars can be a huge burden on the family that is already living paycheck to paycheck. The allowance money is usually tied up to their budgets and this means that you have to look for the extra cash for this purpose. $50 a week, adds up to $200 a month, and this is not a small figure.
It is yet another task that must be managed
Parents are usually busy individuals who are always busy planning, designing and implementing new ideas to make things run smoothly in the house. If the allowance is tied to chores, then it means that you have to sit down every end of the week to calculate how much the kids have earned from their chores. This can be a little time consuming for an already very busy parent.
It is therefore advisable to try and keep the system simple if you still wish to continue with the allowance system, such as one flat rate for all chores, rather than a rate for each. It is also important for you to come up with a workable system for all other things that need to be done, and rather than doing everything by yourself, allocate some of the tasks to the kids so they can help you.
Should You Give Your Child A Monthly Allowance Conclusion
This is not a simple decision, but whatever you decide, ensure that you have your kid’s best interests at heart, and not to make your work easier. They also need to grow up as independent individuals and money is an important aspect of growing up. Make sure you weigh all the pros and cons of giving your child a monthly allowance before you make your final decision.