Ever wondered should kids get allowance, or otherwise handle money? One woman wonders what her kid needs money for, and I explain that below.
I had an interesting conversation with a Work at Home Mother of a 9-year old + twins under 2. I asked her about her kid money system (aka, if she gave her kid an allowance, did she use chores to pay commissions, or does her child otherwise have money of his own to spend). Because I feel it's so important to teach kids about money, I'm always curious to hear what others say.
She responded with something like, “I will give him money when I can answer the question, what does my 9-year old child need money FOR?”
I totally got what she was saying, and at the same time really wanted to address this one. So, here we go!
I’m Amanda L. Grossman from MoneyProdigy.com, where I teach kids aged 8-13 years how to save money through educational adventures, like the Mt. Everest Money Simulation.
Have you ever wondered, “should kids get allowance…” or any money for that matter?
Today I’d like to talk about what the heck a 9-year old, 8-year old, or fill-in-the-blank year-old needs money for.
What's Kids DON'T Need Money For
Because I can certainly tell you what they DON’T need money for (and I’m sure you can, too): they don’t need money for another box of Pokémon cards. They don’t need a dime for more candy. And they certainly don’t need money to spend on snackie-type foods at lunchtime instead of the awesome lunch you are probably making them.
What Kids DO Need Money For
Should kids get allowance?
Here’s what your kids DO need money for: to make choices, face the consequences, learn from the mistakes + successes, and repeat the process.
You see, all those things I just said they don’t need more money for? Those were judgment calls made by me, a 35-year old with a heck of a lot of experience with money + purchasing things + budgeting.
But your child? They have almost no experience with it. Especially if they don’t actually get to touch the stuff.
They don’t know about trade-offs, that making a decision to buy one thing means they have less to buy something else.
They don’t know the power of its value from doing something like not spending it all in one week, and watching it accumulate to the next week, several weeks, or even month.
They don’t know what it means to work 8 hours at a job just to pay for that pair of designer leggings they’ve got their eye on, nor do they have the wisdom yet to do the calculation and decide if it’s actually “worth” it.
Should Kids Get Allowance?
By handling actual money and having some control (within a controlled environment) to spend it as they please, they’re going to get a taste of each of these things: trade-offs, understanding the value of money, decision-making in general, and budgeting.
Keep them moneyless? And the stakes just get higher and higher the older they get to get their money decisions right the first time.
And, let’s be honest, how many of us have gotten OUR money decisions right the first time?