As a kid, my mom gave me $20 every weekend to spend at the video arcade. She meant well, but looking back, it taught me nothing about money or how to handle it. It did not teach me that money comes from working. Had I worked for this money, I likely would have thought twice before spending it all in 1 hour or less. I would have considered saving it for a future want or need.
A few years later, I spent one summer mowing grass for a neighbor. Did I go out and blow this money on useless stuff? No way. I saved it. At summers end, I had an entire cigar box full of $20 dollar bills! I ended up blowing most of it on a bicycle I wanted. But it taught me that money comes from work. Some lessons learned the second time around. When kids work for money and buy things with money they earned, they learn to value the item more than if someone just gave it to them.
I agree with Dave Ramsey on this one. Put kids on commission. Work get paid, don’t work and don’t get paid (just like the real world). Give your kids some paid and unpaid jobs around the home. Pay for completed jobs that are done well. Do not pay for jobs that are only half done.
If done right, this will teach kids the value of money and work, and that the two go together. You can’t have one without the other.
Looking back, I think there was even a feeling of me deserving the money given to me or being entitled to it. That is the mindset of many of our kids today I feel. We don’t deserve anything just because we are breathing air. Many people have that mindset and they are getting entitlement checks from the government today.
Do you have any stories of making money as a kid? Lessons you learned early or wish you had learned?
Your point on value is well taken. I suspect saving has something to do with temperment though. To be willing to lay aside immediate wants to save for a bigger thing. Both our kids earned their “allowances”. One blew it the other saved.
I guess one could still call it an allowance if they like (I just don’t care for that word). But my point is the kids should work around the house for it. Chores. They need to earn it. No giving them money unless work is involved. It won’t kill them. It will teach them valuable lessons that they can use as adults. Clean their rooms, laundry, wash dishes, take out the trash, mow grass, clean the garage, wash the car… that sort of stuff. It’s OK to blow some of the money, but we need to teach kids the value of saving for future needs…. And giving to help the poor.
Thanks for your comment.
I received an allowance, but it was there only if I did my chores and had good reports from my teachers. I believe that kids should earn money, AND that we should use those opportunities to teach and guide them with good financial lessons.
I received a small allowance when I was very young, but once I was old enough to deliver papers, that was it. No allowance, not even for lunch
:S
I wouldn’t be quite so harsh on my own kids; I would say that a couple chores have to be done regardless of allowance, a couple of chores can be done for extra cash, and there would be rewards for good performance at school or whatever.
However, good performance to me means they try and not slacked off… if they gave it their best and got what they got, I can be happy with that.
I’ll also only give them half the allowance and invest the other half for them. I’ll keep them up to date so they can get a feel for the growth of money and the benefits of having savings, and let them buy some stuff they were looking forward to every now and then. Hopefully this will help grow the connection between them and their money, instead of them thinking it just grows on a tree called Mom & Dad and falls off whenever they need it
I completely agree. I think giving a child a no-strings-attached allowance only serves to culture an entitlement mentality – and we all see where that dangerous mindset is taking this country today.
Kids need to learn that, for most people, money really doesn’t grow on trees – it has to be EARNED, and the total amount of money in their saving accounts is a graphic representation of the fruit of their labor.
Best,
Len
Len Penzo dot Com
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I never got an allowance just for the hell of it, it was always – always earned. Doing dishes, cleaning, racking leaves, and so forth.
I did some work around the house. Cut grass, take out the trash, rake leaves. But there were a few times when I got money for nothing.
I agree. Working for their money makes kids learn money managemenet principles at a young age.
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