Allowance: Helpful or Harmful?
I asked my nephews and niece about why they think having their own money is important. Their answer was simple but surprisingly insightful: so they can learn how to budget. The boy said that money needs to be spent because they know that money needs to be managed.Young people today think of money as a resource which they should use for spending.
The answer brought back memories from my own childhood experience. My parents gave me a weekly allowance when I entered high school. Money which I received at first gave me the ability to buy anything I wanted. The ability to choose my own purchases gave me freedom but I had to take care of what I bought. My parents asked me to prepare a financial report at the end of each week which included details about my spending activities. I needed to report every single expense which included snacks and school supplies and unplanned purchases.
I did not understand the process at that time. The system felt too strict because it had multiple requirements which seemed pointless to me. The experience provided me with valuable lessons since I now view it as an important educational moment. The situation gave me the ability to recognize my surroundings. I became more mindful of my choices because I knew I would have to account for them. I developed the ability to recognize essential needs and nonessential wants because I found that minor unplanned expenses would lead to big expenses.
He created a saving incentive program which he gave to us instead of sending us saving reminders.Through his weekly savings question he would show us which amount we wanted to save that week.The total amount we saved would be doubled by him. Saving became exciting through that simple action. The knowledge that we gained from learning to spend responsibly showed us that even tiny purchases would grow into substantial expenses.
The system taught me three skills which include discipline and patience and understanding the worth of waiting for rewards. Financial growth occurs through proper planning because people use money which follows two cycles of coming and going. Strong financial practices require people to learn through extended training which involves receiving instruction from others throughout their learning journey.
My niece and nephews use their budgeting discussions to show that we need to teach others about essential financial principles. Parents should not use their payment system to spoil their children because its purpose is to provide them with money. The process gives children a protected environment which enables them to learn through making mistakes and building their skills. The process of teaching children to control their small money will result in their future ability to manage larger amounts.
The value of an allowance extends beyond its monetary value. A value system develops through this process which helps people develop three important virtues that include responsibility and discipline and prudent decision making. The students need proper guidance to handle their small allowance because it functions as a strong educational tool which teaches them essential skills for their entire life.
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