Allowances can help children understand the concept of budgeting and saving, but we have to teach them. A regular allowance helps kids take responsibility for spending decisions and encourages independence. Instead of getting money 'on demand' whenever they need it, children with regular allowances can learn to plan ahead--to anticipate spending needs and make choices about what's most important.
What Experts Say About Allowances for Children
What age?
If you decide to give an allowance, start one as soon as your children start recognizing money's worth--kids do this fairly early.
If you decide to give an allowance, start one as soon as your children start recognizing money's worth--kids do this fairly early.
Don't give an allowance until children are old enough to manage it. You don't have to give one until your children are at least six years old. There's no need to rush things and preschoolers generally don't understand the abstract idea of money anyway. Once children start first grade they begin learning about money in school.
Keep the system simple so you can manage it. Denying kids an allowance doesn't make it easier to limit the amount of money they get their hands on. Because most children will get the money out of parents anyway, it's better to teach them how to manage it themselves than allow them to nickel and dime you to death. Plus, using an allowance gives parents and children more control over the children's finances.
