Teaching your kids how to effectively manage and earn money is one of the most important lessons your can teach your children as a parent. There are a variety of tools that you can use to instill these qualities in your child. According to Spendsmartcard.com, giving your children an allowance on a daily, weekly, or even monthly basis is particularly effective. If you've decided to give your kids an allowance, here are five tips that you should keep in mind as a parent.
1. Make Your Intentions Clear
If this is the first time you are developing a plan to give your children an allowance, make sure your plan is extremely structured. This will help your children know what to expect and prevent your children from being able to work the system and get more money than they really need. When you introduce your plan to your children, make it clear what types of things the money from their allowance is for and what types of expenditures you will still cover as their parent, like clothes or lunch money.
2. Don’t Limit the Allowance to Household Chores
Many parents have their children earn their allowance by performing certain household chores. However, you don’t have to limit the allowance to only these duties. Instead, round out your approach by giving your children their allowance for a culmination of chores, good grades, and proper behavior at home and while they are away.
3. Be Open to Negotiation
Some parents forgo giving their children any form of an allowance because they state that their children are constantly begging them for their allowance or to raise the amount that they get. Although you don’t have to put up with begging, don’t feel like you can’t negotiate with your children. Negotiating is a valuable skill that your children will use throughout the rest of their life and these skills can be developed with the use of their allowance. If your child feels like they should be getting more for their allowance, encourage them to sit down with you and discuss the reasons instead of allowing them to constantly bring up the subject of you giving them more money.
4. Give Money on Certain Conditions
You may find that giving your children completely free reign to do as they please with their money is an ineffective strategy. To teach your children the power of saving and giving, give your child their allowance on the stipulation that they have to put a portion of the money in savings and donate a certain amount to the charity or organization of their choice. Whatever money they have left over can be put towards what they want to spend it on.
5. Don’t Succumb to PressureThe amount of allowance that you give your children and how you give it to them should be based on your family’s situation and preferences, and not your neighbor’s ideas or how much your children’s friends get. Come up with a system and a plan that works best for your family and ultimately allows your children to learn valuable money management, savings, and giving skills that will help them as they grow older.