Children, Children And Money, College, Credit, Family, Fico Score, Kids, Student Loans
September 17, 2015
Parents, we have a problem. So many of you make a mess out of allowances. You reward the wrong thing, and totally miss out on the big picture: beginning to teach your child about the value of money.
Here are my 3 Suze-Approved Rules for Allowances:
1. Require something of value be delivered in return. Never simply give a child money. Tie it to an age-appropriate task. This is an early lesson in that money is earned. Getting their clothes into the hamper or the Legos back into the container may be spot-on for a five or six year old. Then graduate to emptying the dishwasher, folding laundry etc. Having a teen prepare dinner once a week can be a fun “chore” for all.
2. Never give an allowance for good behavior. Good behavior is what you expect and insist on from every family member. Period. Paying for good behavior is a bribe. Let’s not set that precedent with young kids, okay?
3. Make it a ritual. Set a specific date and time for payment; this instills a sense of respect that works both ways. Younger kids should be paid weekly—you and I both know anything longer is just outside their frame of reference. Before you hand over the allowance, sit down and have a chat about how well (or poorly) your child fulfilled his or her allowance obligations. Be supportive. This is all about teaching, not reprimanding. I don’t recommend withholding allowance for the young ones; punishment isn’t what we want to attach to first lessons about money. Rather, discuss how your child will rally this week-and it’s on you to check in during the week to let them know if they are doing a good job. Remember, positive reinforcement. With older kids, if they punk out on their chores, dock their allowance! They know better. And offer them the opportunity to earn it back with an extra set of chores for the upcoming week.
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