Would you charge your five-year-old rent? Supposedly-savvy mama Essense Evans does, and her post explaining why has gone viral. Evans assures us that her plan of giving a set allowance but then subtracting arbitrary amounts for rent, bills, and food, will prepare her child to handle financial responsibility later in life. Except, it won’t.
Evan’s well-meaning approach is simply not developmentally appropriate. Her strategy doesn’t teach as much as she thinks it does because teaching about money should happen in steps, as the child is developmentally ready to understand. There’s nothing tangible about paying imaginary bills, and young children learn through a real-world, hands-on approach.
A Better Approach
Instead of doling out a highly taxed allowance, parents might consider involving children in meal planning, grocery shopping, and cooking. From a very young age, they can successfully partake in a variety of household chores, which they can cross off on a posted checklist. These are all concrete ways a child can begin to understand, step by step, how she fits into our greater society.
Talking to kids about how money works in the family is also huge. Kids should know that their parent(s)’ jobs are tied directly to the roof over their head, the food on their plate, and the luxuries they enjoy. They should hear about savings, investments, and charities. Tell them about bills and budgets.
Teenagers should have summer and possibly after-school jobs. Let them calculate their hourly rate, and compare it to what they actually take home after taxes. Sit down and help them complete their 1040 forms. Show them yours.
Allow teens to blow their paycheck on those trendy yet over-the-top pricey shoes that you won’t buy them. That will introduce them to the pay-off of hard work. Saving and giving should not be forced. Modeling is much more effective. Talk to your kids about what you’re saving for and which charities you support. When they rise to the occasion and voluntarily save or offer their own money, that is where real learning occurs.
Teaching About Family Contributions
There are some excellent ways that we can help teach our children about money and financial responsibility, which don’t include this lady’s well-intentioned yet futile efforts. But there’s something else we need to consider here. What exactly do we want to teach our children about family contribution? Having a member of the family pay rent directly from allowance doesn’t promote interdependent values or suggest that the family is functioning collectively.
Think about it — if parents make money to pay for things on the budget, one of those things being rent or mortgage, another being children’s allowance, taxing it makes no sense. If the parents choose to use an allowance model, the family budget should include a reasonable and affordable amount that goes towards the children. That’s it. Kids are smart. They will figure this out and resent you for simulating a false scenario. It’s just a $2 allowance in the end, and that’s what they see.
Tough love just doesn’t encourage kids. Our children will learn about financial responsibility through positive experiences that we provide for them, supported by scaffolds that we take down gradually as they mature.
