It is an age old question, “Do you or do you not give your kids an allowance?”  Depending on how you grew up and if your parents did or did not give you an allowance will most likely influence your stance on the matter.  Coming from a home where my dad was very tight with money and never gave us an allowance period I tend to lean towards that side of things.  However, I do find some substantial benefits to giving your child an allowance.

Receiving an allowance can be a wonderful learning experience for kids if it is handled correctly and is used as just that, a “teaching tool”.  In order for it to do so and actually teach kids something it will have to be approached and handled properly.  There will have to be a “system” put into place that will allow a child to learn from receiving the money about both spending and saving, and possibly even about “earning”.

These are three important topics surrounding money that can be taught via the “allowance” if you so desire to do so as a way to teach your child about money.  For instance, you could have your child “earn” their allowance by performing chores.  This would help them to learn that money is “earned” not “free” and that they will have to do so in life in order to obtain the items that they need and want.

You could also use it to teach your child about savings by insisting that they save a percentage of their allowance for a “rainy day” or maybe even for something that they are wishing for allowing them to see what it is like to save for and purchase an item.

Finally, you couod use the allowance as a tool to teach your child about how much items cost by allowing them to purchase the things that they are wishing for with their allowance rather than your buying it for them.  Helping them to begin to understand the cost of the things that they so often take for granted.

These are just a few of the ways that you can use the allowance to teach your child about money.