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Why I don’t give my kids an allowance

September 2nd, 2009

In this series on Teaching Children About Money, my practice is to maintain the primary control of money for my children while they are young.

I don’t give allowances to my kids. I pay for  everything they need and, within reasonable limits, just about everything they want. Both my parents and my husband’s parents raised us that way. And, both my husband and I are financially conservative and responsible. So I’m figuring it works, at least in our case.

Another reason why I don’t give an allowance to my children when they are young is that they cannot yet grasp the relative value of money to be able to spend their allowance appropriately.

My daughter came home with $5 that her friend gave her for a 5-cent piece of gum. (I told her to give back the $5). My other daughter wanted to give a $100 birthday present to a friend she just met. Has this ever happen with your children?

Young kids cannot understand the concept of the value of money. And because they are limited in seeing long term planning, they cannot budget wisely.  If we expect them to budget their allowance, and they save up $50 for the school bookfair to buy stuff for their friends, what are we going to say to that? I’ve seen children go to the school bookfair with $100 in an envelop and spending it on all kinds of junk. Friends are sponging off of them asking for games, pens, and posters. They enjoy the popularity of the moment. Well, it’s their money, but the problem is, they end up with bad habits in spending.

I rather teach my kids by budgeting for them and teaching them along the way as I show them how much to spend. “Here’s $15 for the bookfair. This is enough to get yourself a paperback book and a pen for yourself and your friend.” When we go to the mall, I give them $15 and allow them to pick a t-shirt they want, rather than have them budget $50 of their allowance for a t-shirt. I want them to know that $15 is the correct amount to spend on a shirt, not $50.

I know many of you probably handle finances with your children very differently. I’d like to hear some of your ideas and how they’ve worked.

There is definitely more than one way to teach financial responsibility, and families operate on different budgets. There are also many tools, workbooks, etc. on the market that will help you. You have to choose the style that fits the personality of your family.


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  1. […] your children are given money, whether it was a gift, an allowance, or earned, how do you encourage your children to give a portion of that to a […]

  2. If you find yourself assisting most, it is time to pause and reflect.
    A budget lets us know what we can not afford, nonetheless it doesn’t stop us from buying it.


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