An allowance helps prepare for life

We hear over and over that ‘money is the root of all evil,’ or that ‘money can’t buy happiness.’ So how come it’s such a major part of our lives? Couples fight over it so much that it’s one of the top reasons for divorce.

Money makes a statement about our priorities. How much we spend, what we buy, and whether we succeed or fail at living within our means reveals much about our character and values.

Years ago, I had a paper route. Because most papers are now delivered by professional services, it’s a shame that none (or a tragic few) of today’s young people have the experience I did. At the age of 12, I was responsible for counting, managing and collecting money from just about everyone in the neighborhood. This led me to understand something that a young person can’t grasp from just hearing it preached: Money does NOT, in fact, grow on trees.

Constant bombardment from the media and the Internet ensures that today’s young people have a greater desire for money, or more precisely, the things that money can buy. Neither a strength nor a flaw, mind you, but it is a reflection of the fact that the Western world enjoys more wealth and prosperity than ever before. So it makes sense to teach children how to handle money at the earliest age possible.

Before the paper route, I had an allowance. Seems old fashioned, doesn’t it? I wonder how many children receive allowances nowadays. My experience indicates that a lot of parents just resentfully hand over money on demand. Then they wonder why the kids don’t appreciate it. How in the world is somebody supposed to appreciate something when it’s handed to them unconditionally? We have no business criticizing kids for problems we enable. 

Though it’s a handout, an allowance reflects the obvious fact that the child cannot yet earn money in the adult world. But the way a parent goes about it is important. Allowance implies a limit. It communicates that, ‘I’m giving you money, but only so much. You have to figure out how to make it last.’ This is superior to doling out cash on demand, and then wondering why it’s not appreciated. (And, worse yet, wondering why he moves back into the house at age 25 and refuses to pay bills, work or leave! But that’s another column.)

Experts suggest that before parents mindlessly hand over money to children, they should first talk with them about it. A basic discussion about saving, investing and donating, as well as spending, can help kids understand that money gives them the power to make choices. If you want your kids to appreciate money, show them how difficult it is to hold on to! Let them experience the frustration when it runs out. You’re not harming your child’s self-esteem by doing this; in fact, you’re helping him or her to cope in the real world of his or her future — where you might not be around as a safety net.

Encourage your child to spend her allowance on things you would normally buy, such as clothes or school supplies. Of course, you’re paying either way, but letting the child play consumer is effective practice for adulthood. Experts also suggest that allowances should not be tied to behavior or chores, and shouldn’t be withdrawn as punishment. If the chore is something the child is obligated to do anyway, such as making the bed, etc., then don’t engage in bribery for these obligations. At the same time, if the child does extra jobs, you can work out arrangements for bonuses. Sounds like the real world, doesn’t it?

The primary subject here is spending, but it’s ultimately about thinking. Children have to grow up into thinking adults, with true self-esteem and a sense of responsibility. The need for money, and the potential for shortage, requires us all to be good thinkers. It’s never too early to learn how to think — or how to spend.