How much do you know about the history of U.S. money? Did you know that there used to be a 2-cent coin? Or a 5-cent bill? Or that Martha Washington is the only female in U.S. history to appear on paper money? If these cool money facts interest you, then…
Parents have a lot of important decisions to make in regards to their kids. One of those decisions that is sometimes overlooked, although still important, is whether or not to give an allowance.
Growing up, I recall a lot of my friends getting allowances. When I asked my parents about getting an allowance of my own, our conversation went a little something like this:
Me: Hey Dad, can I start getting an allowance so I can have some extra cash?
Dad: Sure. If you want to start helping out around the house by doing the dishes, taking out the garbage and helping out around the yard, I’ll give you an allowance.
Me: How about we just forget we had this conversation and things can stay the way they are?
Dad: That’s what I thought.
I never received an allowance, per se, although my parents provided me with whatever money I needed to do the activities I wanted to. As long as I got my homework done and did what little was asked of me, my parents didn’t feel the need to give me a weekly allowance because they were essentially already doing that.
Other families have different philosophies when it comes to allowances. I had friends who had to help out around the house or else their parents wouldn’t give them any money. While that seems like a reasonable tradeoff, I remember for some friends, it was almost like having a full-time job as an 11-year old.
Paying a child an allowance has its benefits, although it also comes with its disadvantages. Let’s start with the benefits:
- Teaches kids about finances, responsibility, and the consequences of decision making with money.
- If tied to chores, kids learn the relationship between work and pay.
- It gives kids spending money for nonessential items such as toys and video games.
- Motivates kids to get their chores done.
Here are some disadvantages to paying kids an allowance:
- According to multiple studies, kids who receive an allowance tend to think less about money in general.
- Paying kids for doing chores teaches them that working for money isn’t always fun.
- Kids may begin to think they should get paid for every little bit of work they do around the house.
Now that we’ve established some pros and cons of paying kids an allowance, if a parent decides the pros outweigh the cons, at what age should a kid begin receiving an allowance? This depends on the development of the child.
Children as young as three already understand what money is used for, although they are unable to differentiate between the different coins. Most experts agree that children in first grade know enough about money that they are able to receive an allowance.
Once you decide to give your kids an allowance, the question becomes how much? A popular way to determine the amount of money earned per week is the age of the child. For example, if the child is seven, they would receive $7 per week. Another philosophy is to give the child half of their age. This part of the decision depends solely on how much the parents are willing to give.
A more complicated method is basing the allowance off the difficulty of the chores. Simple chores would pay out less money while more difficult chores would pay out more money.
In the end, it’s fairly simple. If the child meets the predetermined requirements, they receive the agreed upon allowance. If they fail to meet the predetermined requirements, they don’t get the money.
What do YOU think? Should kids get paid an allowance? Why or why not? Let us know in the comments section below!