With Allowance Comes Responsibility

 

CURTIS LEE Staff Writer

Money has been the most important system of exchanging since trading itself. It has been referenced in almost every modern civilization discovered and continues to dominate many of the decisions that are made today. Food, insurance, safety, transportation and other items, both wants and needs, can all be bought with money. Family allowances from the federal government date back to the 1700’s and 1800’s and are partially responsible for the modern day allowance that many adolescents receive from their parents. Allowance should be given to children over the age of 10. It teaches the importance of saving and responsible spending.

Saving is vital to good financial planning for the future. Allowance is a hands-on learning tool for kids to practice how to save money. Spending stimulates the current economy and even increases tax revenue; however, saving is equally as important. When the elderly are no longer able to work and do not have enough money saved up, they become dependant on government aid which is unsustainable in the long run. Immediate consequences can also be seen in the lack of saving. As many refer to it, a “rainy day” may strike and individuals may find themselves unable to pay for a hefty unforeseen medical bill for a family member or the loss of a job. Savings allow for flexibility in future scenarios when money is needed.

A portion of the allocated allowance should be taught to be saved for future use, even if it is for a fun toy. This is a start to help kids understand the importance of saving money. The other benefit of receiving an allowance is for kids to learn how to spend responsibly. Spending money is quick and easy, especially on items that are desirable, but the ability to exercise self control is important. When parents give money to their kids only upon pre-approval, parents are not allowing their kids to exercise their ability to make the right choices. At some point kids need to learn how to use the $10 that they have for the week. Whether that would be for sodas, a new book, a Lego set or to save for a more expensive investment, all of these choices have benefits and drawbacks that kids should be able to analyze and learn themselves. They not learn the consequences of not having enough money if they are overspending without actual repercussions to credit scores or assets. As kids turn into teenagers, often responsibilities and freedoms are increased and so should their allowance.

Allowance is just one of the ways that parents can test and mentor their children to be wise with the cash that they receive. Money is necessary for surviving in the modern world. There are many ways to earn and spend money depending on each individual. Through allowance, parents give their kids the advantages of learning how to save money as well as how to spend it responsibly. The success of a business or personal finances are dependant on saving and spending responsibly.