Most of us feel that the way to learn to be responsible with money is to have some. It’s a learning process that should probably start when we are children. For many of us it did.
In fact, if you have children, I recommend having an “allowance” category in your budget or spending plan. But, how much should you give them and what should it be based on?
It should go without saying that the younger the child, the smaller the allowance. You wouldn’t want to give a 2 year old a $5 bill. You’d probably start out with a quarter and see what she does with it. If she puts it up her nose, or drops it down the air conditioning vent, you know she’s not ready to deal with high finance.
I also recommend having your child’s allowance split up. Instead of giving your 5 year old a $5 bill, for example, try giving him five $1 bills. One of them goes into an envelope or jar labeled “tithes and offerings”; two of them go into an envelope or jar labeled “savings” and the other two are available for him to spend right away.
This will teach your child to give and to save before he spends. Two very important lessons that many adults could stand to learn!
But, should the allowance be tied to anything? When I was growing up, our allowance was tied to chores. Now, it wasn’t a hard, fast rule, but for the most part, we were expected to do our chores in order to earn our allowance. The other rule of thought is that the allowance itself just happens, but a child can earn extra money through chores.
I read the following quote on the Kiplinger website: “My children are well-taken care of. With that said, allowance is tied to contributing to the family, whether it be chores or whatever. Just giving money to anyone is generally a bad idea. It fosters a mindset of “it’s owed to me.””
Personally, I agree with this philosophy. I think we are seeing the result of this sense of entitlement in some of the younger employees in the work force today. If fact, connecting money to work is a sound biblical principle. Paul said:
“For even when we were with you, this we commanded you, that if any would not work, neither should he eat.” ~2nd Thessalonians 3:10 (KJV)
Allowances can be tough for the single parent whose budget is already stretched to the limit. But, I highly recommend carving out a small allowance and making it a line item in your spending plan. The lessons it will teach your young children will be invaluable to them when they are older.