Bellwood Principal
Making Allowances
"But Mom, it only costs $15!" is likely a familiar phrase repeated in your household. How do you teach your children the value of money without robbing them of their childhood? Perhaps it's time to reinstate the child-sized paycheck--an allowance.
Paying a Price
Just as the value of a house is only the amount a buyer is willing to pay, the value of any item truly lies in what it costs someone to obtain it. Handing your child money at the first request robs the child of the benefit of valuing what he or she desires. Giving your child a reasonable allowance for work completed and requiring him or her to save toward purchases adds value to the desired item. It gives the child the joy of anticipation, a benefit parents steal from their children when they hand them things too quickly.
You can tie regular chores to an allowance, giving your child the experience of earning wages. You might consider offering a bonus for seasonal chores like mowing the lawn, washing windows, or shoveling snow.
Teaching a Lesson
Any child old enough to get an allowance is old enough to learn simple budgeting skills. Label a few envelopes with categories such as "savings," "lunch money," "giving," and "spending." Agree with your child how much of the allowance should go into each envelope each week. If the child is versed in computers, help him or her keep a spreadsheet or simple log of each category.
If your child is saving for a particular item, spend time together researching the best features and prices. Then help your child make the best choice based on his or her needs. Shop together and teach your child to make wise purchase decisions.
With budgeting, you can also teach your child to be generous and compassionate. Help your child choose a nonprofit organization and regularly send an amount to the group. As an added incentive, you can make an agreement to match your child's donations.
Reaping the Benefits
In these difficult economic times, unanticipated or spontaneous purchases can greatly impact a family's resources. By giving your child a reasonable and regular allowance, you can minimize spontaneous expenditures and better manage your cash flow. The child who has a small allowance not only learns the value of money, but also gains confidence and self-esteem.
This article was taken from the March edition of Cut & Paste Magazine.
