Teaching Your Kids About Money By NOT Giving Them Allowance

I don't have kids, but recently read a conversation over at No Limit Ladies, between an entrepreneur and the blogger who runs the site, regarding whether it is good or bad to give your kids an allowance. It got me thinking about where I stand on the issue. For those of you who haven't had a chance to read the article it brings up some good points, but the gist of the article is that it is better to teach your how to sell items and earn money than give them handouts.

I generally agree with the entrepreneur's point of view on the site, but maybe not to the extreme he does. I really value entrepreneurship, people who work hard, and don't want my kids sitting around looking for handouts. But, I'm not sure I want them pawning their toys to buy the newest Nintendo Wii game.

I think my take on the issue is I think that kids shouldn't get an allowance by default. My view is that kids should learn to pull their own weight and have certain set duties as well as other things that they may be asked to help with. If they want to make some extra money to go out to the movies or buy some new clothes they can ask me to help out around the house with other chores which each have an assigned dollar value. I think that is the easiest way to show kids the direct correlation between work and purchasing things. I might not each them how they have to hustle to sell things and how difficult it is to start a business - but it will teach them the value of money and how hard savings can be.

I'm also a big fan of matching money that kids invest. I don't know how well it works since I don't know anyone who personally does it with their kids, but it seems like a way to encourage savings if nothing else.

Link
No Limit Ladies - Why I don't give my kids allowance