Often, parents are caught in the dilemma of whether or not they should give their child any allowance. The basic reason behind their adamancy is the fact that they are unaware of what the consequences of their decision may be. People perceive the results differently, but here are a few reasons which will help any parent learn the importance of giving an allowance to their child.
1. Infusing the concept of budgeting in them:
The concept of budgeting is one of the essential things which should be taught to children from an early stage Parents may think that the kids will waste money if they are given it, but this is not always true. It actually helps children realize that why and how much money should be spent – knowing that they will not be getting any more until the next week or the next month starts.
2. Giving them the freedom of choice:
You can’t always tell your children what to do when it comes to using their money, they must be given at least some freedom of what they want to buy and how they want to use their earnings. This will help them learn the value of money, and also learn that you don’t always need to buy everything just because you have money to spend.
3. Teaching them responsibility:
Putting money into the hands of children actually, makes them more responsible. They are aware of their spending limit and must learn to adjust their habits to meet those limits. If they want money for that Nintendo game, they definitely have to save enough from their pocket.
4. Teaching the value of saving:
Parents tend to agree with the notion that the kids will waste money if it is directly given to them and prefer to save for their children themselves, while this is wise, it is also wise to help your children save on their own too. It’s principle with a little bit of coaching support.
5. Avoiding unnecessary purchases:
The importance of money is only realized when it comes from your own pocket. In reality, the value of money becomes clear to children only when they learn more about the costs of luxury items such as iPods, video games, and clothes. It helps instill value by assisting children in working towards a savings goal.
It is important to empower your children through financial coaching. By instilling the practice of earning an allowance, your child may be one step closer to becoming a responsible and financially sound adult.