glossary:
allowance: money which parents give regularly to children who are still at school or college to pay for some of their living expenses such as food, clothes and entertainment
According to surveys, abount half of parents don't grant allowances.
Its proponents of giving allowance argue that an allowances can help a child learn about money, that he has to make choices among the many things he wants and must work and save for them. But there's a downside:an allowance can be a crutch for a parent. As long as the child can afford to pay for something-- say, a barbed-wise wrist tattoo-- a parent might be more un willing to say no.
some parents also connect money to household chores or grade performance' which I think is a mistake. Your child should help at home because he is a member of the family and should work hard at school without a financial incentive
Carol Seefeldt, a researcher on children's concepts of money at the University of Maryland, says that "if you want children to learn to make wise decisions, plan and budget, they need more than an allowance to do that" She suggestes that parents involve kids in simple decisions involving the cost of meals and clothing and teach them to help compare prices before shopping for the family.
Our children are already bombarded with opportunities to spend money, and the options are about to explode through online shopping geared specifically toward kids. Several new websites, such as I can buy, Rocketcash and Dough-net, well set up accounts in a child's name. Parents can deposit a small amount from a credit card or use Grandma's birthday money as their child's online slush fund. These cybermalls are only too happy to point your child toward must-have products. They also offer FDIC-insured banking services so that little Timmy can watch his money earn interest between spending binges.
I guess that, as a start, we can do much more to tech our children that money is not just for spending. No matter what the source of their income, whether earned of from gifts, children should be encouraged to save and to give. A system of tree piggy banks--one for spending money, one for saving and one for contributing to charity--is recommended by many money experts. Online sites can also teach about investing: younginvestor.com is a good one.
In our house I've offered to pay my daughter to take on jobs that I might otherwise pay an outsider to do, such as shoveling snow from the walk or raking leaves. But we 're abandoning our allowance fare--after I repay the $257 I owe her. Fortunately for me, she has generously offered to let me retire that dept at low interest, in weekly installments--you know, kind of like an allowance.