Teaching Children About Money

If you are a parent, you have probably heard the pleas for money every time your child opens his mouth. This is particularly true if you have a teenage child who seems to be in need of cash all the time. One solution you may have considered is an allowance as payment to your child in exchange for chores. This may temporarily eliminate the begging and pleading, but it also teaches child that by whining and complaining they will be able to get what they want. Is that what you want to teach your child?

It is important not to simply hand money over to your children. Even if you attach a list of chores that your child must complete in order to receive the allowance I would still not recommend it. Household chores are a part of family. Giving your child money for doing work around the home will be instilling within them the attitude that they should be paid for being a part of the family unit.  This type of attitude will not help them with their financial future. To become a financial success your child will need to learn that they will need to be willing to work for free to build the businesses that will make them successful.

One benefit that is often overlooked by parents is the child’s participation in running the household. It is important that your child understands that they are a part of the big picture in your home and doing their part is one of the responsibilities. An allowance will not give them that incentive to be a part of the big picture in your household. While some parents may argue that children should pull their own weight by being given a monetary compensation, it cannot provide the motivation that your child needs to learn in order to run their own home someday.

Another avenue that many parents feel an allowance opens up is teaching your children about money management. It is true that having money at their disposal gives your children the opportunity to save up for some of the bigger ticket items that they might be craving. Learning how to save their money and buying things only when they have saved up enough, is an important lesson that will carry throughout into their adulthood. However, learning the motivation that a lack of money can give them will encourage them to find ways to earn their own money and not just simply play the waiting game. We want to get their financial creative juices flowing.

There are many other opportunities to teach children some important lessons about money. Not only will you be teaching them how to live within their means and save up for the things that they want, you will also be showing them how to create their own financial opportunities to make their own money. These are vital lessons for children to learn as they grow up. It is up to the parents to help their children learn these important lessons.

Before you begin paying your children for their work in the home, it is important to think through all of the possibilities and negative lessons that could be learned. If your child becomes ill and cannot perform their chores will they still receive their money? If they set up their own sources of making money and recruit their friends and family in their enterprises then they won’t need to worry if they get sick. Their businesses will be able to run themselves. These are all things that need to be considered before you decide to give your child money.