The average child is getting so much allowance money these days that you might confuse it for Social Security.
The Financial Literacy Commission of the American Institute of CPAs recently released a survey that says the average American kid gets $65 a month to spend as they like, above and beyond what parents buy for them. Even more shocking (or not), just 1% of the parents say their wee ones put any of the cash into savings.
These kids are this close to being politicians-in-training.
What is dangerous about allowance–just giving money out–is that the child doesn't associate money with work. The earlier they start to learn about doing work and getting paid for it (don't forget the budget), the more prepared they will be for the real world.
If a son or daughter gets stuck in the "bring me money so I can do what I want" mindset, it will be incredibly hard to break them from that thinking. They might struggle to hold onto a job as they get old enough to live on their own. They might even want to move back in with you. Cue dramatic organ music.
Replace allowance with commission. Work and get paid. Don't ... and don't. Just like the real world. Start teaching your children that lesson early so they gravitate toward it throughout their lives. The benefits go beyond just keeping their room clean. They will learn responsibility, and that spills over into other areas of their lives.
And make sure to set reasonable pay for chores. A child who has to work hard and save money for a while will get a more realistic view of money (and the work that goes into getting it) than someone who does a couple of chores around the house and suddenly has enough cash to buy a video game or the shirt they want. Pay should be based on how hard they work relative to their age.
Sitting on your duff doesn't earn money. Work does. Are your kids learning that?
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