Should kids work for their allowance? My own view is that chores around the house are part of life, and that the allowance is a child's share of the family income. I never explicitly linked the two with my three children.
THE EXAMPLE YOU SET
Giving your kid an allowance and encouraging him or her to learn to save and spend well is an important step toward adult financial realities. But they're also absorbing lessons from you every day. You are their most powerful role model, so be mindful of the example you set. And, whenever possible, explain what you're doing and why (using age-appropriate discretion):
- Teach them to be prudent consumers by comparison shopping and to understand advertising and promotion.
- Point out your own savings, investing goals and strategies. As your kids get older or start earning money on their own, open Roth IRAs or custodial accounts to give them some hands-on experience with investing.
- Use April as an opportunity to talk about taxes, to teach them about our responsibility as citizens, and that gross earnings and take-home pay are very different.
- Help them understand the role of credit cards: Their benefits (ease of use, consumer protection, etc.) and their many dangers (the spiraling cost of revolving debt, expensive fees for missed payments, etc.).
THE WORLD OF WORK
I also think it's invaluable when kids get a taste of work during their teenage years. As long as the job doesn't interfere with school, there's no better way to learn about the value of a dollar than earning one. And jobs teach kids about the fundamentals of the real world; the importance of responsibility, teamwork and putting forth your best effort.
I realize that most teenage jobs aren't fulfilling in the way that careers are, and you definitely want your child to find an endeavor they can feel passionate about. Another part of preparing them for the adult working world is to expose them to different jobs and professions. Recognize their interests and, if possible, find ways to educate them about related jobs. For example, teens can do informational interviews with friends who are working in a particular field; older teens and college students can often find internships in companies that interest them. It's not always possible to use Robert Frost's phrase, "to unite my avocation and my vocation," but it's certainly worth trying.
Money isn't the only thing, but preparing our kids to deal with it and respect it is a vital mandate for parents. Accept that mandate and set a good example. Your kids will profit in a way that money can't buy.
