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| Education and Financial

02/26/14

Child's Play: Is giving kids allowance still relevant?

Not long ago, kids didn't necessarily ask for money just for the sake of doing so. Rather, they pulled from a reserve called an "allowance," funds given to them my parents to learn the value of a dollar.
The dollar doesn't go quite as far as it used to, and the allowance arguably has given way to children asking for a few bucks when they need it, and not exactly learning how to manage money as a result of that practice.
Does anyone even implement the lost art of giving an allowance?
The original premise of an allowance was either linked to giving kids a small sum of money to "live" off for an entire week or attaching that dollar figure to a list of household chores to be completed. The latter is pretty straight forward and needs little explanation, and actually lays the groundwork for children understanding the basic outline of having a job.
The traditional allowance of giving kids money and advising them to spend it wisely has transformed to some degree. It centers more on parents simply handing over cash when kids need it, devoid of that spending limit or the amount being a set figure for the entire week.

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Dropping that aspect of the allowance truly defeats the purpose of it entirely.
The mentality moms and dads want to foster is one of cautiousness when it comes to cash and having kids pick up on the simple notion that once your money is gone, you don't have any more to spend. This may seem trivial in the year 2014, but think of all the adults who struggle daily with money issues and wonder whether or not handling, saving and spending money properly was engrained into their existence when they were younger.
When they asked for $20 to go to the movies, and then another $40 for a yearbook, did dad simply fork over the cash without question? If so, that statistic is quite telling in the overall scope of securing financial acumen as a child.
This isn't suggesting that parents should stop providing for children and have them start chipping in for rent or utilities before they hit the age of 10, but rather associating money with buying the things you want and learning to temper any unnecessary spending.
And if kids choose to take their allowance and spend it within a few days, that's there choice. But parents failing to stick to the original game plan and thus hand over more money before the next allowance is due are indirectly cultivating a generation of kids turned adults that will suck the ATM machine dry before the next payday in two weeks.
And by then, they may no longer have their parents and that long gone allowance to bail them out.

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