Child development experts have debated for generations over the value or harm of giving young children a weekly allowance and, if given, at what age. My responses to this burning issue? "Yes," and "Beginning at age three."
When children understand that Mommy and Daddy go to the store and buy things with money, then they are ready to start to learn more about money. Usually children pick up on this relationship between money and buying things at a young age. To check, ask your child, "What does Mommy or Daddy do with money in a store?" If they understand that it takes money to be able to leave the store with merchandise, then they are ready to begin with the following money management techniques.
The goal of this book is to help you teach your children about money management. To do that, youngsters must have real money of their own to manage. Rather than handing a youngster a sizable sum of money, or doling it out a dollar at a time, a weekly allowance gives the child a source of income that he or she can learn to make decisions about.
I will focus more specifically on the size of the allowance later in this chapter, but in general, the sum needs to be large enough so the kid can do all the money management exercises that will prepare her for the future. (Be prepared: the fifty cents a week that you got as a child won't enable your offspring to learn much about finance today!)
The second heated debate concerning allowances is about whether this weekly money should be tied to chores. Yes, yes, yes! In addition to using an allowance to teach money management, this weekly sum will also show your child the relationship between work (chores) and money (allowance), clearly an important concept. Not only will the child someday work for money, but earning an allowance will underscore the fact that you, the parent, work hard for your money, too.
Before getting into how much allowance to give, and when and where to give it, let's go over the decisions you have to make as a parent before you start an allowance, or, if you are already giving your child an allowance, how you can restructure it to enable her to manage different aspects of finance.
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 | Excerpted from Money Doesn't Grow on Trees by Neale S. Godfrey and Carolina Edwards. Copyright 1994 by Neale S. Godfrey. Originally published by Fireside. Excerpted by permission of Curtis Brown, Ltd. |
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