Talking About Money and Allowance in Simple English
Money is a part of life. We use it to buy food, clothes, and things we need every day. But talking about money isn't always easy. Sometimes people feel embarrassed or uncomfortable talking about it, even with family members. However, money is something everyone deals with. It's important to talk about it openly and honestly, especially when it comes to giving or receiving an allowance.
An allowance is money that someone—like a parent—gives on a regular basis to another person, often a child, to spend or save. If you've ever heard the word "allowance" but weren't sure what it means, don't worry. This blog will explain everything about money and allowance in simple words so you can learn and understand.
Why Talking About Money Is Important
Money affects many parts of life. It can influence what you can buy, where you can live, and even how much free time you have. If you don't talk about money or understand it, you might feel confused or even stressed about it later. That's why it's good to have money conversations, especially at home.
It’s also important to teach kids about money. Having these discussions early on helps them grow up knowing how to save, budget, and spend wisely. Allowance is one way parents can teach their children about money.
What Is an Allowance?
An allowance is money given to someone—usually a child—on a regular schedule, like every week or every month. Parents often give their kids allowances to teach them how to handle money. For example, if a parent gives $10 each week, they might tell their child to save part of it and spend the rest.
Allowances can serve many purposes:
- Teach Responsibility: A child learns they can’t spend all their money at once or they won’t have any left for the things they want.
- Develop Good Habits: Kids can learn how to save for bigger purchases instead of buying small, unnecessary items.
- Introduce Budgeting: Parents can help kids plan out what they want to buy, how much to save, and how much to spend.
How Much Allowance Should Be Given?
There is no "right" amount of allowance to give. Every family is different, and how much money parents can afford to give depends on their income and goals. Some families may choose to give $5 a week, while others might give $20 a month.
Here are a few tips for deciding how much allowance is right:
- Think About Age: Younger children usually don’t need as much money because they don’t have many expenses. Older kids or teens might need more money for school lunches, bus fares, or hobbies.
- Consider the Budget: Parents should make sure the amount of allowance fits comfortably within their family budget. It’s not good to give more money than they can afford.
- Set Clear Rules: Parents can explain how they expect their child to use the allowance. For example, “Save half and spend half.”
Allowance and Chores
Some parents tie allowance to chores—extra tasks the child does around the house, like washing the dishes, cleaning their room, or taking out the trash. Other parents give allowance freely, even if their child doesn’t do chores. Neither method is wrong, but families need to find what works best for them.
If allowance is tied to chores, it teaches kids that they have to work to earn money. This can be a great lesson for kids, as it mirrors what adults do in real life. Adults work jobs to get paid, and kids who "work" by doing chores may see the connection.
However, some parents argue that chores are simply part of family duties and shouldn't need payment. They prefer to give allowance separately and teach kids about money in other ways.
Teaching Kids About Money
Giving allowance is only one part of teaching kids about money. Parents can and should help kids learn important financial skills, like these:
- Saving: Kids should learn to save money for future needs or wants. For example, saving for a new game, a bike, or a school trip can teach patience and the value of planning ahead.
- Spending Wisely: Parents can remind kids to avoid impulsive purchases. Before buying something, ask, “Do you really need this?”
- Budgeting: Budgeting means creating a plan for how to use your money. A child with $10 allowance can create a simple budget: Spend $5, save $4, and give $1 to charity.
- Understanding Needs vs. Wants: Needs are the things we must have to live, like food, clothes, and shelter. Wants are extras, like toys, candies, or fancy gadgets.
How Adults Can Model Good Money Habits
Children often learn about money by watching their parents or guardians. If adults talk about money and show good habits—like budgeting and saving—kids are more likely to follow those examples. Parents don’t have to be perfect, but they can share money tips in simple ways.
For example:
- Show your child how you budget for groceries or monthly bills.
- Teach them how to check prices when shopping.
- Talk about why saving money is important.
Final Thoughts
Talking about money doesn’t have to be hard. It's a big subject, but it’s also an important one. Families that talk openly about money—whether it's allowance, spending, or saving—help kids grow up with valuable life skills.
Allowance can be a great tool to teach kids how to manage money wisely. With patience and guidance, kids can learn to save, budget, and spend responsibly. So don’t be afraid to start the conversation about money today. It’s never too early or too late to talk about finances in simple, clear ways!