The Pros and Cons of Giving Your Child Money Allowance

An allowance is a milestone for parents and children. For kids, it means freedom, while parents get the privilege of teaching their children the value of money. 

You shouldn't give your child their allowance until they understand the importance of money. Once they're ready to receive an allowance, you may decide to provide them with a monthly or a weekly allowance. 

Many families do both; children who do chores and earn an hourly wage may get monthly allowances. Here are some advantages and disadvantages to giving your children an allowance to help you decide what’s suitable for your family.

Pros:

• Kids learn the value of money by seeing how to spend it. Having an allowance helps them realize the value of a dollar and how hard it is to earn. It is a learning process that goes far beyond paying for necessities. Children gain skills that will make them money-smart adults, and they can learn how to make sound financial choices by learning to budget and save.
• An allowance helps kids make social connections. When you provide your kid with a budget, they'll likely want to spend it on friends or gifts. This teaches children to be generous because giving away money becomes a part of their allowance.
• An allowance fosters independence. When it becomes a dependable means of income, kids are better equipped to handle unexpected expenses.
• A weekly allowance is more manageable for parents. When you give your child a weekly allowance, you know exactly how much they will spend and that it's manageable if you need to give your child extra.
• A weekly allowance encourages kids to save.
  

Cons:

• A weekly allowance is easy to spend all at once. When you give your child money each week, they might spend it all at once on a trip to the mall to buy friends gifts.
• A weekly allowance doesn't teach your child to budget or save. While kids might develop better saving habits if they're given a weekly allowance, a monthly allowance will provide them with more opportunities to learn how to budget.
• A monthly allowance keeps your child from learning to budget.
• Kids who don't earn a wage from chores will demand a portion of the monthly allowance.
• A monthly allowance is too easy for parents and children to overspend.
• A monthly allowance might put a strain on your family’s budget.
• Kids tend to resent getting an allowance.
• A monthly allowance might not be enough to cover the expenses your children have.
  

How Much Should You Give Your Child?

It's hard to say how much you should give your child because their needs are different. The amount you give them will depend on how much you can afford and how much responsibility you want your child to have. 

Some parents want their kids to earn as much as each month, while others wish to give their children only a small allowance. There are no right or wrong answers.

If you're deciding between a weekly or monthly allowance, here are some factors to consider:

• Are you comfortable giving your child a weekly allowance?
• Do you want your child to learn how to save at an early age?
• Would you be comfortable giving your child a monthly budget?
• Will your child manage their monthly allowance?
• Can you afford to give your child a monthly allowance?
  

Conclusion

You should take time to decide to give your child allowance and with a mature approach. If you have extra cash, consider giving that to your child rather than a regular allowance. The bottom line is to make sure you’re ready to handle the potential challenges that may arise from handing your child their allowance. 

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