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So many financial experts offer differing opinions about whether parents should give their children an allowance and whether that allowance should be for chores or just something received without being tied to work. What do you recommend in terms of giving a child an allowance and whether work should be part of that?
Dear Concerned Parents,
Educating your children about how to handle money is not only one of the skills that you must teach your children, in fact, research shows that children form their primary money habits by age seven. Like it or not, we are teaching our kids how to feel, talk about, and use money, by our very example.
The Bible instructs us to start early!
Proverbs 22:6, "Train up a child in the way he should go: and when he is old, he will not depart from it."
So, yes, I believe an allowance should be conditional upon completing chores.
It's been interesting in recent years to see some in the advice business argue that an allowance should not be connected to work such as chores around the home. A fundamental lesson of money is that we all are instructed to work to cover our expenses, if we are physically able. This is an important life lesson, and as we give our children money for work, we can then teach them how to manage that valuable resource.
Two major benefits of working for an allowance are learning to support yourself and learning to manage money early in life.
Lesson 1: Work to support yourself.
The Apostle Paul in 2 Thessalonians 3:6-12 writes, "We worked hard night and day so none of you would have to give us anything … When we were with you, we told you that if a man does not work, he should not eat. We hear that some are not working. But they are spending their time trying to see what others are doing. Our words to such people are that they should be quiet and go to work."
The sad thing is too many parents today don't ask their children to lend a hand, which can give the impression that work is optional rather than required. A recent Wall Street Journal article noted a survey showing that while 82% of parents reported having regular chores growing up, only 28% ask the same of their children. Sadly, freeing our children from work to focus on their studies alone isn't good for them.
Marty Rossmann, professor emeritus at the University of Minnesota, is known for a study that followed 84 children into their 20s. Children who had chores beginning at ages 3 and 4 experienced better relationships with family and friends, better academic and career success, and were more self-sufficient, compared to those who didn't have responsibilities at home until they were teenagers.
Still, it's very important when we are giving our children chores that we keep them age appropriate so that they can accomplish the tasks. A child of 3 can help pick up the toys he or she threw on the floor, but can't do the laundry! Crown has a number of resources to help parents determine how best to handle household tasks, and by requiring help we teach children that they are an important part of a family, not just a guest.
Lesson 2: With the money the children earn, teach them to budget early
After our boys had done their work and received their reward, we could then teach them how to allocate their funds. My wife Ann and I taught our boys that when they earn money they needed to give first, save second and spend last. Ann used simple three-ring binders with three clear pockets inside, marked Give, Save and Spend. In the early years, we allocated 10% to giving, 70% to saving and 10% to spending. These amounts change over time.
Proverbs 3:9-10 notes, "Honor the Lord with your wealth and with the first-fruits of all your produce; then your barns will be filled with plenty, and your vats will be bursting with wine."
The discipline of giving is best learned as a child and with the practice of putting God first with our money, we will also learn to put Him first in our hearts.
These principles are important, part of a pattern that will be life changing. Consider also doing a Bible study as a family that teaches Biblical financial principles so that you can talk about money from God's perspective in a relaxed environment. The investment you make in your children's financial education will last a lifetime.
Visit Crown's children resource center for more helpful tips for raising fiscally responsible kids.
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