Why do some parents give their children money to spend each week?
Did you know that more than 60% of parents in the U.S. give their kids pocket money (an allowance) of $30 weekly?
Some people think that giving their children a certain amount of money every week will help them have fewer financial problems in the future.
Do you agree or disagree?
Pocket money should be given to children. Do you agree or disagree?
Essay Answer
The payment of a weekly allowance to children may help them learn to control a limited amount of money. But, without any deeper discussion driven by parents regarding money matters such as how to budget and make use of credit wisely, the impact of simply paying pocket money to children is somewhat limited. It does not guarantee that children will not experience financial difficulties later in their adult lives.
There is much more to managing money successfully than simply receiving it and then spending it. Children who receive a weekly allowance from their parents may do so for various reasons. However, if the main reason is that the parents see it as a way to avoid dealing with the topic of managing money in greater depth with their children, then the practice becomes less effective. But if the regular payment of an allowance forms the foundation of deeper financial education where parents are proactive in teaching their children about different aspects of money management, it is much ore effective.
One of the main problems is that many parents are not educated in terms of finance. So what happens? They simply pass on misunderstood ideas, concepts, and habits concerning managing money. The number of adults in serious debt currently is headline news and those who have experienced serious financial difficulties during their lifetime bear testament to the fact that simply receiving pocket money as a child is no surefire solution to avoiding financial problems in adult life.
Similar to any life skill, managing money requires a sound foundation of facts relating to money matters and a degree of practical experience. Parents can achieve this by engaging with their children and showing them the wider role of money management and not simply act as a source of regular payments for their children.
Pocket Money - The Good
It's a great way for a young person to learn responsibility, how to use money, and prioritize spending.
Many parents do it for their kids and they grow up without having to make decisions about what they buy with their own money. What's worse is that these kids haven't learned even rudimentary concepts like understanding the value of a product, or comparative pricing and quality!
To be fair, this is still not perfect in the real world but it is better than just giving your kid an unlimited wallet! Plus you can teach them about saving from time to time; put away $5 into a piggy bank each week for a 2nd grader as an allowance so they learn by doing math at home.
Paying kids an allowance for their housework and chores is a good idea. This provides the opportunity to teach them personal finance from an early age because each paycheck advances them to the next level in the family hierarchy of needs.
For example, on Mondays through Fridays, Seth does his table-setting duties without being asked and receives twenty dollars as his weekly allowance.
On Saturdays, he washes dishes without being asked (which earns him fifty cents) then dusts off shelves and vacuums a layer of dust off the baseboards (for which he gets four dollars) because those things were on our chore list for that week.
Pocket money - does it build character?
What fun as a kid! Do you remember walking up to a cash register with the sweaty anticipation of buying your first comic book or something like that?
Perhaps a better question is "what are the pros and cons of giving pocket money to kids?" for some families, this might be something they struggle with.
Here are a few considerations that might help you decide for your family:
1) children often use their money inappropriately; e.g., buying very unhealthy convenience foods. if your child doesn't have much impulse control over what he or she spends his or her money on anyway, then having more discretionary income may not do much good when it comes to eating healthfully.
2) many children spend all (or most) of their money immediately - which may result in feelings of deprivation and shame towards themselves when they can't buy anything at all for the rest of the week/month.
Pocket Money - The Bad
Yes, in some cases it might be a good idea, but be careful you don't spoil your kids.
Giving kids pocket money is not good because it may lead to children expecting a certain amount of money or 'pay' for doing nothing.
For example, the cycle begins of expecting pay without being wholly responsible for the work. It's also possible that they may lose interest in tasks as a result.
Kids might grow up being more dependant on others to do things for them, such as paying someone else to do their laundry.
The best way to prevent this from happening is by providing an allowance instead which can vary according to what chores are completed each week and how well they're done. This creates a sense of achievement and appreciation of the value of money.
Pocket money can be an incentive for potentially irresponsible behavior.
Too often, parents are hesitant to use pocket money as a way to control their child's financial involvement and instead give their children their allowance without restrictions.
Once they've learned the basics of saving, spending, and budgeting pocket money becomes less important.
It's given based on a set price that will usually change with the general cost of living, at the expense of your child's desires.
For younger kids who have limited experience with making purchases or thinking about what to do with their time rather than buying junk food all day long it can be more detrimental than motivating.
How would you write an essay on pocket money - should it be given or not?