The Short of It
Did you know you may be doing your kids' allowance all wrong? Yeah, me neither.
Financial expert Ron Lieber, author of the book "The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money," says parents are making big mistakes when it comes to helping kids earn their keep around the house.
In fact, weekly allowances should have nothing to do with chores, according to Leiber. That association trains young people to stop doing things around the house when they feel they've amassed enough of a fortune.
Don't worry; he's not suggesting kids shouldn't do chores. They should—just not for profit.
Another allowance no-no? Simply forking over the cash without talking about its importance.
"The greatest act of protection we can commit is to talk to our children about money a lot more often," Leiber wrote in a piece for Slate.com.
He argues against telling kids the family's finances are none of their business, which will leave them financially naive when the time comes to make their own decisions about money.
Instead, Leiber's advice is to start giving kids a weekly allowance early—like preschool early—and use it as foundational training about concepts like budgeting and saving.
How? Involve kids in financial decisions that affect them, he says, such as buying back-to-school clothes. Kids can even set aside some of their own money for these types of purchases.
Leiber even suggests allowing kids to fail when it comes to making decisions about money. He is of the mindset that failing when it doesn't matter as much—age 12 versus age 24—is a far wiser parenting strategy.
As far as how much to dole out, he says the weekly stipend should increase as your child ages, from a dollar to as much as you can afford. Try giving a dollar amount tied to your chid's age, so $6 a week for a 6-year-old.
Leiber's allowance manifesto may be too extreme for some parents. It is for me. But a few of the principles are thought provoking, especially given that my kids have NO concept of money. They think buying a car is the same as buying a stuffed animal. But, I just can't get past the notion that kids are only kids once. Why make them grow up too fast?
What's your take?
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