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Cornell University : Cornell Cooperative Extension
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| Yates Association |
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Children and Money |
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By age 10, the average American child visits 250 stores a year without his or her parents. Parents who are able and willing to help their children develop consumer skills can prevent a lot of poor choices and bad habits about money and the marketplace. Parents
can teach even very young children about coins and paper money, the
concept of trading money for goods, and what a check is. But by the
pre-teen years, kid's knowledge should have expanded to include the
more sophisticated concepts of comparison shopping and trade-offs:
"if you buy this, you can't buy that, because money is a limited
resource." When you give an allowance you want to set the ground rules so your kids are clear what the allowance is for. These rules will change as your kids develop and mature. One rule might be related to where portions of the allowance go: part is set aside to give to charity; part is saved; and part is available for spending . You may want to identify what your child can spend the allowance on. Be selective on the number of limitations you put on your child's allowance. The value of an allowance is for kids to learn to control money to achieve recognized wants and needs. Should the allowance be tied to jobs at home? There are several philosophies on this. One says, "yes," children should be given a list of jobs at home and not be paid their allowance if these jobs are not done. At the opposite end, is the philosophy that kids should receive an allowance regardless of what they do at home. A middle ground is that some jobs are required and tied to the allowance, others are optional. There are many variations. Parents must decide what the purpose of the allowance is and what they trying to teach their children. If you are trying to teach your children that resources are limited, that they must set aside money for certain needs and desires and that they must learn to choose among many choices, either philosophy works as long as they are receiving an allowance. If you are teaching them the relationship between work and money - no work, no money then the job should be tied to the allowance. If you want them to understand that as part of the family, they have responsibility to contribute to the tasks of that family, regardless of monetary payment, then you do not want to tie the allowance to the task. They are separate issues. A middle ground is for there to be daily tasks that are required of each family member, each member gets an allowance, but more money could be earned if the child does additional jobs or tasks. (For example, it may be a family job to set the table, clear, and do dishes regularly, but mowing the lawn is an extra. Your child doesn't get paid for doing regular tasks, but could be paid beyond the allowance for mowing the lawn.) This teaches both concepts, no work - no pay, and responsibility as a team member regardless of dollars involved. It also gives your child his or her own money to begin to make allocation choices: to save, to give, and to spend. What about kids and TV advertising? By the age of 10, children have developed some skepticism about advertising and are less likely to want something simply because they saw a commercial about it. But they aren't as skeptical as parents would like them to be. This is a good age to make sure children understand the concept of advertising and marketing and that all claims made for a product are not necessarily true. Remember, no one is born a smart consumer. It's something we all have to learn over time and the sooner our children begin, the better. Parents can play a key role if they keep the child's stage of development in mind when doing so. Cornell
Cooperative Extension Yates Association |
