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Parents See Allowances As An Educational Tool

By Amy Nathan

In doing research for The Kids’ Allowance Book (Walker & Co., 1998), I questioned more than 160 kids from around the country, as well as several of their parents to learn how allowances worked in their families. The youngsters report that they see an allowance as not just a great way to get spending money, but also as a way to learn how to manage money wisely. As one girl notes in the book, “My allowance helps me realize I need to be careful and not blow my money.”

For the parents I spoke with, the educational aspect of having an allowance rates high as the main reason they decided to give their children an allowance. Here are some comments parents made as to why they had started allowances in their family:

  • “We decided to give her an allowance so she would learn responsibility and that you have to work for what you want.”
  • “I hoped it would give her a sense of independence and teach her a bit of fiscal responsibility.”
  • “To encourage decision-making on how to spend money. To learn how to save for things he wants.”

How these families have gone about organizing their kids’ allowance plans differs a lot. Some tie the allowance to chores; others don’t. Some pay once a week; others use a monthly payday. No matter what type of set up they use, many of these families admit to having occasional bouts of allowance breakdown. Allowances generally start out with the best of intentions on everyone’s part, but then for various reasons the allowance may bog down. Parents may forget to pay on time, kids may forget to do their chores, or everyone may lose track of whether or not the allowance actually got paid, leading to endless did-we-or-did-we-not-give-the-allowance-this-week debates. About one out of every four of the kids interviewed for the book has experienced allowance breakdown at one time or another, leading to new arrangements having to be worked out with parents to get the allowance rolling along again.

The Kids’ Allowance Book (written for kids age 8 to 14) presents the fix-it-up solutions these kids and parents have come up with, along with descriptions of the variety of ways different families set up allowance plans for children. There doesn’t seem to be any one exclusive “right” way to do it that would work well for all situations. The kids and parents that I questioned for this book report having good results with a wide range of options.

The key to allowance success seems to depend on a willingness to talk over allowance problems as they pop up, and a flexibility in scouting out ways to solve those problems so the allowance can stay on track. The various kid-tested plans and trouble-shooting strategies described in The Kids’ Allowance Book can help kids and families keep an allowance going, so youngsters can have an opportunity to make good use of this valuable educational tool and learn important money-management skills that can last a lifetime.

© Amy Nathan, 1999

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