Family Philosophies About Money are Varied
Families have different philosophies about allowances, depending on their histories, values, and attitudes toward money. Some parents require children to do regular chores to receive an allowance. Others believe all family members should do chores and that allowances should be unconditional - kids automatically should get part of the family's income. Some don't tie allowances to chores, but do pay for extra jobs, like cleaning the garage. Other parents don't give allowances at all, but dole out money as children need it.
Children Learn by Observing
Whether you give your children allowances or not, remember that they learn by observing. "The more conscious you are about what your behavior teaches children about money, the more effectively you'll model good habits," says Sharon Danes, professor and family economist, University of Minnesota, St. Paul. "If you're not paying attention, you may be teaching them things you don't want to."
Remember that just having money doesn't teach children how to manage it. Whether their children work for allowances or receive them unconditionally, parents should look for teaching moments when they pay up. That way either method can help kids learn to manage money.
- Look for day-to-day situations that all children to draw conclusions about money. If they bought a cheap toy and it broke, ask if they'd make the same decision next time.
- Don't keep kids form learning basic life lessons. Let them keep track of their own money; if they lose it, it's a learning experience.
- Don't revoke allowances as a punishment for misbehavior. The child will see an allowance as discipline, not a money management tool.
- If your child asks for an advance on an allowance, don't dismiss the idea. It may be a reasonable request, and it's a change to educate about loans.
St. Paul Federal Credit Union offers savings accounts for kids. Talk to one of our professionals today about getting an account started for your child. Stop by or call today at 651-772-8744.