When I was a kid, in the late 1970s and early 1980s, I started to receive an allowance. My father would give me $.50 a week, and I had to do certain chores around the house to earn it. I didn’t get to keep the entire allowance, however. I had to save $.25 each week.

I looked forward to that allowance with great anticipation. I had a little money in my pocket to buy baseball cards, candy, or to save it. I felt grown up.

Now that I have kids of my own, I’m confronted with the allowance question from a new perspective. Do I give my boys an allowance each week to give them the feeling that I had as a kid? Or do I teach them that doing chores around the house is simply part of the expectation of living together as a family unit? Here are a few thoughts on each side.

Why an Allowance Is a Good Idea

Here's how an allowance can make your child better with money.

1. It Must Come With Strings Attached

Let’s face it, nothing is free in life, and the sooner our kids learn that, the better. So, it makes sense that an allowance should be tied to chores. That will turn the allowance into an incentive for doing work around the house. And that work should be determined ahead of time, and should be something that is age-appropriate and can be performed and checked weekly.

2. It Will Begin to Teach Your Child the Value of Working Hard

If you want something in life, you have to work to earn it. If you want money to buy something, or do something with your friends, then you have to do x, y, or z around the house to get it.

3. It Will Give Your Child the Skills to Handle a Small Amount of Money

This is a powerful life lesson, if handled correctly by the parents. You need to take the initiative to show your children how to make wise decisions with their money and not squander it. You can help them determine how to prioritize their spending, how to save for big items, and how and when to reward themselves for a job well done.

4. It Can Help Teach Them Responsibility

And instill confidence if they take it seriously and make good choices.

Why an Allowance Is a Bad Idea

Here's how an allowance can backfire. 

5. It Can Get Messy If They Aren't Contributing

If your children are falling behind on doing their chores, or have not earned their allowance, that will set up a very negative and acrimonious situation in your home. No one needs that.

6. It Might Be Challenging if Money Is Tight

It might be tough to come up with an extra $10 dollars or so each week on top of everything else that you have to pay for.

7. It's Not Easy Teaching Them That Sometimes in Life They Will Not Be Paid 

Your children need to learn that sometimes in life they won’t be tangibly rewarded for doing a necessary job. If you establish a relationship between doing chores or jobs around the house and getting paid each time, you’ve set a potentially dangerous precedent. Sometimes chores simply need to be done because Mom and Dad asked you to do them. That means helping out the family with tasks and chores is not a job. It’s simply part of living in a family unit, and the sooner our children realize that, the better. 

8. It Might Be Too Much for Your Child to Handle

It takes a lot of responsibility to handle money and make choices on how to spend it. If your child spends money foolishly or doesn’t handle it appropriately, it can lead to headaches for you and hard times for them.

Do you give your kids an allowance? How do you manage it? Share with us!

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