Your Mind Your Body

Happy 2K10: A new year and a new decade! Often with the start of a new year, we feel compelled to make resolutions and make changes in our daily lives. Perhaps one thing that we learned from the financial crisis of the last couple of years is that most Americans do not save enough for the proverbial “rainy days.” If, as parents, we are not engaging in the practice of sound money management, how are we teaching our children to be fiscally judicious?

Recently, I read an article in our local newspaper about allowances for children and the benefits of teaching kids about money management and savings. I did not know that there is currently a debate on whether a child’s allowance should be tied to household chores. According to the article, about half of the parents who give an allowance to their children believe that a child should earn it. The rest disagree.

What could we teach our children by having them earn their allowance? For starters, children could learn to appreciate the joy of being rewarded for jobs well-done on a consistent basis. They can understand that money does not grow on trees and realize that dads and moms also work to earn their money. Furthermore, they can learn delayed gratification. We often hear ourselves complain about the entitlement of the younger generations. In part, we contribute to this phenomenon by giving our children what they want, when they want it, how they want it. As parents, we can be part of the solution by teaching our young ones that they can save their earned money to get what they want.  In the meantime, our children can also learn that there is a big difference between what we need and what we want. The earlier we learn that distinction, the better they can appreciate what really matters in life.

Two factors to highlight with regard to allowances is the need for clarity and consistency by both children and perhaps, more importantly, parents. Parents need to be clear with their children about how they can earn their allowance.  Once a plan of action for earning an allowance is agreed upon, stick to the plan. Do not reward them when they have not met expectations. This defeats its purpose. On the other hand, if they do what it is expected, be sure pay up! It is only fair.

As 2010 gets on its way, it may be time for all of us to review, change, and commit to a fiscally sound way of managing our money. It can be a proactive way to lessen money worries and be clear on our financial goals… and teach our children financial responsibility along the way.

Filed under: Children, Lifestyle & Behaviors, Parenting, Relationships, Stress, Women, Work/Life