Millions of kids each week get allowances. These range from petty change to large bills. Allowances are often given free of charge without any responsibilities at all. This creates kids who don’t understand the value of money and who often take things for granted. While an allowance can teach kids how to manage money, most of the time it does just the opposite. When there are no chores or jobs associated with the allowance, it basically is free money. And who wouldn’t want free money?
When you don’t have to work for money, you have less attachment to it. Free money promotes free spending and less reasons to save it. When you actually have to work for the money, you don’t want to spend it as easily because you know how hard it was to earn it. Money does not grow on trees but I have seen a lot of kids that think it must because of how much “stuff” they seem to have. When you think about it, it’s not really the kid’s fault they have that concept. It’s the parent’s fault for buying them everything they want without teaching them the value of money. According to Webster’s dictionary, the first definition of an allowance is “a share or portion allotted or granted.” The very definition of the word says that there is nothing that has to be given in return.
Kids will be more likely to take things for granted if they are always handed stuff for free. Everyone knows a spoiled kid with all the latest and greatest toys and gadgets. When they get everything they want, what’s left? Sometimes, it is good to want for things because when you finally earn them, you will probably be more appreciative.
If a child receives everything they could ever ask for while they are young, they are more likely to mismanage their finances later in life. The won’t understand the connection between money and saving or spending. That’s why so many adults end up in debt — they think their money will never run out.
Some of you reading this are probably thinking, “What does this kid know about money and financial responsibilities?” Well, I know that at 14, I have never received an allowance. I have saved practically every Christmas and birthday money gift I have received for years. And I think long and hard before I spend any of my money. Having my Pencil Bugs business since I was nine has also taught me the value of money, what it means to work for it, and how to be financially smart which will make me better prepared when I’m an adult.
My parents never received an allowance when they were kids and they didn’t give me one. I probably won’t give my kids an allowance either. Even though I’m still like most kids and I like the thought of ‘something for nothing’, I know that philosophy doesn’t do any good in the long run.
