Financial Literacy Month is almost over. Please don’t miss this opportunity to start an allowance for your kids. Here are just three reasons why this is a good idea:
1. YOU will probably SAVE money in the long run. My own children began to exhibit smarter money behaviors after only a few months of receiving an allowance because they knew my wife and I were serious about not reaching into our pockets to accommodate their every want at the store. Of course, there were lots of difficult “no” responses and a few in-store temper tantrums during this “testing” period. However, they came to realize that if they wanted something small, it had to come from their “Spend Smart” money jar. If they wanted something big, they’d have to commit to the delayed gratification of plunking their money week after week in their “Save” jars. (See the video above for more on the jars.) A few years into the program, my wife had HER epiphany: We were spending less money on them than we would have been had we not given them allowance. By intentionally providing them with more consistent money on a weekly basis, we had saved money. A significant reason for this is because once kids realize that they’re operating with THEIR money, they start to make smarter choices. This leads to my second point:
2. You will EMPOWER them. Raising money-smart, “money-comfortable” kids is an important theme on this blog. Providing children with their own allowance – their OWN money – is very empowering for them. It’s a key step in helping them to become comfortable with money. By handling money and making choices every week to share some, save some and spend some, your kids will feel empowered. When you open up a dialogue with your kids about money, you are taking an incredibly important step in teaching them to become money-smart. We parents know that children are always striving to be treated as more mature versions of themselves. By providing them an allowance with which they can make their OWN choices, muddle through their OWN mistakes and revel in their OWN successes, you can help empower them. It’s a funny irony when you think about it: When we are kids, we just want to be treated more like adults. Once we become adults, all we want is to experience some of the carefree days of childhood.
John Lanza, Chief Mammal and Creator, explains how to distribute your weekly allowance into the three-jar system.
3. You’re INVESTING in their FUTURE! Many parents pay for piano lessons, sink money into kids’ sporting activities, find enlightening camps to send them to and do so, so much for their kids these days. Maybe we should hire a financial planner for them too. Ok, that might be a bit much. But we can all start training them to be money-smart. By starting a meaningful allowance program this week, you can help save yourself money and empower your children. I hope I’ve made that clear thus far. Furthermore, it’s also a great investment that you can make in your children’s futures. In fact, you could argue that doing so is as valuable as any other area in which we invest money in our children. You can take some time this week to try some simple money activities with your kids. You’ll realize that it’s not that difficult for any of us to pass on good habits to our kids. In fact, starting a money-smart program in your own home can help you reprioritize your own thoughts and habits regarding money. Don’t let past mistakes haunt you and keep you from making this valuable investment in your kids. And don’t think that your particular situation exempts you from this. Smart-money lessons are truly for every child.
Start an allowance today.
Chief Mammal & Creator, The Money Mammals