Allowances Vs Chores: Better Way To Teach A Child Financial Responsibility

Outlook Money

Financial Education To Children

There are often debates about to teach children the best way to be responsible with money. Weather should be given after completing chores or without that. This decision has a huge and lifelong impact on a child's sense of responsibility. 

Allowances  

Allowances for children is one of the most recommended initial steps to teach them about budgeting, saving, and spending. Research shows that 86 per cent of parents feel giving a child an allowance teaches him/her important financial skills. In some cases, allowances tie directly to chores, meaning that money is earned and not merely given. 

What do allowances do?

Allowances enable children to receive money without facing any risks. Regardless of whether they use it immediately or save for a larger purchase, their spending choices educate them about the consequences of their financial decision-making.

Allowance Tied to Chores

According to studies, getting paid for work like cleaning, etc., can have the perverse effect of diminishing intrinsic motivation in children. Chores then will not remain as what they like to do rather they can become completely focused on the reward element.

Hybrid Approaches

The hybrid approach presents a middle ground to eliminate both allowance and chores extremes. This makes allowance useful for parents, but most parents also deem it right to give children more money when they complete other tasks besides their assigned chores.

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