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Should Kids Get an Allowance

You may be wondering should kids get an allowance. The answer is yes! Keep reading to learn all the benefits for your child.

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Allowance is providing an amount of money regularly. It can be a fixed or a variable amount and weekly or monthly.

Teaching your kids about personal finance is something all parents should have as a priority. Sometimes parents avoid money talk and allowance because they aren’t sure what to teach their kids.  They may not even realize that it’s their job to teach them to handle their money properly.  I’m a saver, while my husband’s a spender so we have experience from different points of view to teach kids how to handle their money correctly.

Giving your kids an allowance is a great tool for you to be able to teach your kids about spending habits and saving, which has many benefits throughout their entire life.

Closeup of broom sweeping a large pile of dust

Should Kids Get an Allowance

Paying kids a weekly allowance for chores they complete has many benefits. If you scroll down, you’ll read why you should give your kids an allowance.

What if we didn’t teach our kids about money?

They may end up in debt when they are older.  It doesn’t take much, as most of us know,  to end up owing money on a credit card bill.  It only takes a few “special” purchases to get in over your head.

They will become financially irresponsible.  At one time or another, everyone has lived paycheck to paycheck.  You still might be.  Wouldn’t it be great to teach your children that it doesn’t have to be that way?

They may believe that tangible items will bring happiness We don’t want our kids to learn that a special kind of shoe brings happiness or that they have to have an expensive pair of headphones.

Encourages Financial Responsibility

An allowance gives kids a chance to learn how to manage money. Our children must learn money management like saving and spending responsibly. Your kids will feel comfortable with money and won’t run off and spend it as soon as they have some.  They will be able to make decisions for themselves without asking anyone for help.

Allowance teaches the value of hard work. As adults, we know that you don’t get something for doing nothing! It’s hard work to mow the lawn to get that allowance and it’s hard work to save up for a new toy. Additionally, as children work to fulfill their chore responsibilities, they develop important life skills such as discipline, responsibility, time management, and perseverance- all of which are essential for success in school, work, and life in general.

The allowance helps kids start building savings habits early on. Teaching kids to save up for a purchase instead of going into debt will benefit them their entire lives. Kids may feel different about a new scooter purchase if they paid for it themselves. Taking that money out of a savings account is a huge accomplishment for them.

metallic piggy bank

Develop Better Decision-making Skills

Kids will develop better decisions about how to spend their money if they are earning money.  They will be able to make responsible decisions with their money as they grow.  They will learn how to save and budget from an early age which will make them more independent.

Teaches the value of making choices and understanding the implications of those choices. I love this lesson! My son mostly spends his money on eating fast food with friends. I know he’s learning when he runs out of money and has to eat at home at the end of the week.

Builds Trust

Giving allowance brings trust to your relationship. It’s telling your child that you trust them with the money and to spend it appropriately and gives them confidence.

Children learn from making mistakes. I’ll go back to my son and his eating-out choices. Luckily, it’s nothing serious but he’s learning to buy something less expensive or make sure he has enough to do something spur of the moment.

Teaches kids about Delayed Gratification

This is hard for adults too! An allowance gives kids control and allows them to plan and save for what they really want.

In the end, it shows how saving money can pay great dividends later in life. If they save up and buy something they want, like a skateboard or guitar, then when they get older they will have the confidence that they’ll be able to save up for a car or house.

boy in green shirt holding pink piggy bank and putting in a quarter

Help Kids Understand The Importance Of Hard Work

Getting paid for a job helps kids identify the effort required to earn money. They may realize sometimes the money they get isn’t worth it if the job is hard. They may make the decision not to do the job again. This is something that will come up when they are a teen with a job and adults.

When kids want to earn money they get creative and it encourages entrepreneurship. This is one of the best things that come out of teaching kids about money. It may encourage them to pursue something they are passionate about or learn a new skill because they will get paid more.

Kids learn that their efforts can be rewarded. I know when our son mows our yard and then skips out on the weed whacking, he doesn’t get paid. When he does it right the first time he is paid and he can move on.

My husband and I believe giving our children an allowance is important in teaching skills to be MONEY SMART!

More articles in this kid allowance series