Friday, March 20, 2009

Letting Kids Earn Their Allowances

In our modern society, it is embarrassing that we consistently churn out graduates and ph.Ds by the truck loads who can drone for hours on their topics of specialisation but are utterly helpless in balancing their check book.

Letting Kids Earn Their Allowances
They don't know the difference between asset and liability and have little worries about excessive debts so long as their earnings increase every year. Their confidence stem from a mentality of entitlement - since they are so well-qualified, good jobs must be lining up for them.
Unfortunately, the world don't owe them a living. And globalisation will drive home this point further.

To prepare our kids for competitive future, I cannot stress enough about financial literacy, without which one cannot learn and develop financial responsibility and discipline. I don't have a high education, as compared to kids these days, but I thank my parents for giving me money lessons early in my life.

I feel that one of the best ways to inculcate a proper work ethic ("work equals pay") in our children is to give them the opportunity to earn pocket money from jobs that go beyond cleaning up after themselves or fulfilling family responsibilities.

From what I've noticed, kids actually get interested in money at a young age, and a parent can use that interest to teach basic concepts, including math. Giving your kids pocket money when they stretch out their hands actually cultivates an undesirable habit of taking things for granted. It is difficult to wean off even when the kids entered adulthood.

Parents are at fault for doting too much on their kids and employing maids to do their kids' bidding. They prefer their kids to play computer games, watch TV or chat online instead of doing constructive work around the house, for fear that the kids tire themselves out or suffer injuries. Well, if my dad has his way, he will say this: "Stop being so f*cking precious."

Now, that is a bit rough but I grew up fine. That is why I insist that kids must be given opportunities to earn their allowances early. Besides helping out with household chores, they can provide services to neighbors such as babysitting, painting, lawn-moving and yard work, etc. It is just a matter of getting creative.

Once they start to earn money through their own effort, they can learn to handle the money. At that stage, it's a good idea to teach them how to control expenses (entertainment, food, transportation, etc.) and save their spare money in change jars.

In addition, you can teach them to think about their desired stuff (computer games, ipod, shoes, etc) and how long it will take to accumulate enough money to buy them. This will reinforce the value of time as well as money to your kids.

I am not an ardent fan of capitalism but it is indeniable that money makes the world go round and kids need to learn how to use money responsibly. Financial lessons should begin at home and if we don't teach our kids (who else will?), their future money woes become our problems too.

If you have never considered getting your kids to earn their allowances, start off today by getting them to make their own beds, tidy their bedrooms, clean up the dining table and wash the toilets occasionally.

As parents, we also have to practice what we preach and demonstrate our responsibility in handling money. Setting the right examples will build a sturdy foundation for our kids to follow.