Dollars & Cents for Youth
Lesson 2 - Study Course For Parents
Main Ideas
• Key Words
• Money Talk
• The Allowance
• Some Guidelines for an Allowance
• Earnings
• Things To Do
• Lesson 3
Main Ideas
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Allowances, gifts, handouts, and earnings are the sources
of money for most children.
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A small allowance given on a regular basis will benefit a
child more than a larger, occasional handout.
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Giving children money as needed makes it difficult for
them to plan ahead for spending.
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When children receive money as a gift, unless it is a
really large sum, they should be able to decide how to use it. Encourage
them to save a portion of large monetary gifts.
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Earning money helps children become financially
independent and broadens the economic choices they need to make.
- Earning money offers opportunities for children to
understand money in terms of time, skills, and effort.
Key Words
Allowance - A specific sum of money given to a child
on a regular basis to cover certain personal expenses.
Earnings - Money received for jobs done at
home beyond regular chores or away from home. It is the child's
"paycheck."
Money Talk
It is not easy to teach children to manage money, especially
with the changes in financial markets and high cost of living. As parents, you
need to come face to face with the anxieties you have about money, and then you'll
be better able to help your children manage their money.
Where do your children get their money? Most children get
money from allowances, handouts, cash gifts, rewards, and/or earnings. If one of
your objectives as a parent is to provide your children a real understanding of
money, you will use the allowance method for giving your child money. An
allowance gives youngsters the opportunity to manage money and introduces them
to living within a regular income as if they were employed. This experience is
most nearly like the adult world they will move into all too quickly.
Some parents feel they really can't afford an allowance for
their child because they view it as an extra expense in the family spending
plan. All parents spend money on their children in a variety of ways almost
every day. If you feel you can't afford an allowance, keep a record of what
you give your child during this next week for school expenses (lunches,
supplies, etc.), minor clothing needs, entertainment, and hobbies. Then give
your child this amount in the form of an allowance and let him/her know in
general what it is to cover. This is not extra money going out of the family
budget; the money was already budgeted to be spent. Now the child will have the
experience of managing the money and deciding about the actual spending.
If a child cannot depend on a regular income - such as an
allowance - he/she will never be able to plan ahead for spending and saving.
The Allowance
For an allowance to work, parents and children must know what
expenses are covered, how they will handle overspending, and/or other problems
that might arise.
Should your child be required to earn an allowance by doing
certain jobs around the house or yard? No. Keep these two concepts separate.
Actually, children have some right to part of the family income just because
they are members of the family. It's better to give them some of this in the
form of an allowance.
On the other hand, children should learn that they have a
responsibility to share in routine household tasks and shouldn't expect money
as a reward. They should learn that helping around the house is part of
belonging to a family.
The use of an allowance as a source of money for children
should be "no-strings-attached." Make an agreement that is most
acceptable to you and your child and then stick to it.
When you stop your child's allowance as a disciplinary
measure or increase it as a reward, you lose sight of your real purpose -
teaching how to use money and learning to make decisions.
Some Guidelines for an Allowance
Beginning with the first allowance and continuing as long as
the child receives one:
- Be consistent. Set a day to give the allowance as well as
the amount. Agree upon the limits for spending.
- Don't use an allowance as discipline. Withholding or
reducing a child's allowance for bad behavior and increasing it for good
behavior defeats the purpose of an allowance, which is to teach the basics
of money handling.
- Don't link household chores to the allowance. As a
member of the family, it is reasonable to expect a child to carry out tasks
around the house consistent with the age of the child. Household jobs can be
made fun! A weekly, rotating schedule may avoid nagging or the need for
consistent reminding.
- Every allowance should include some money the child can
spend however he/she wishes.
- Don't come to the rescue every time your youngster runs
out of money.
Earnings
Earning money either for home chores beyond regular
responsibilities or through a job outside the home permits a child to add to
his/her allowance and at the same time develop a responsible and positive
attitude toward work.
Most homes offer some opportunity for earning money. For
extra money, children can do some jobs that you might hire outside help for -
such as weeding the flower beds, cleaning the basement, cleaning leaves from the
roof, mowing the lawn, babysitting, etc.
The job should be within the youngster's capabilities. Your
judgment in assigning the job can be very important to success. Both of you need
to agree upon the amount to be paid depending upon the job. If your child is
capable of doing the job and wants to do it, pay what you would for outside help
to the degree that the work is satisfactorily completed. Overpayment only causes
a false sense of worth.
As children get older, they may wish to seek a job outside
the home. Before the child accepts the job, be sure he/she understands the
responsibility it carries. Be sure he/she has enough time for fun, sleep, study,
school activities, and family responsibilities. Children often overestimate
their ability and then suffer a feeling of failure. School work may suffer if
he/she works more than 20 hours per week.
A job offers a child opportunities to understand money in
terms of time, skill, and effort. Perhaps your child never thought about the
relationship of a hamburger to an hour's worth of babysitting or grass
cutting.
Things to Do
Parents
- Keep a record of "handouts" for a week or so
for each child. Evaluate where the money is going. Talk with each child and
as a family. Consider using the allowance approach; or, if you use it
already, think of increasing and giving the child more responsibility.
- Discuss the allowance with your children before beginning
it. Decide on such things as:
- The amount of the allowance $__________.
- The allowance will be paid on __________(day).
- the expenses the allowance will cover are __________, __________, __________.
- The amount of money to be saved is $__________.
- The date to review how I've used my allowance is __________.
- It might be meaningful for the child to write this up in
the form of a contract and have both parent and child sign it.
- Provide some regular form of income for your children. Be
sure both you and your child understand the arrangement - how much money is
to be given, when, what conditions, and what it's to be used for.
- Make a list of possible jobs and discuss advantages and disadvantages of each.
Decide on an "at home job" and sign a contract with the child.
|
I will ____________________ (job) for ____________________
(Dollar Amount)
on _____________________ (Day)
_________________________
Child's
Name |
The Preschooler
- Let the child pay for items in the store when you shop.
- If older children in the family get an allowance, the preschooler at 3 or
4 may be mature enough to begin receiving a small amount of money regularly.
- Encourage the preschooler to help with chores around the house.
The 6- to 12-Year-Old
- Provide an allowance based on needs and ability to handle money. The
younger child may need to receive his/her allowance two or three times a
week; an older child could manage a weekly allowance.
- Help the child make a spending plan for his/her money.
- Expect acceptance of home responsibilities. Teach child standards for
each job.
- Provide opportunities for both at-home and away-from-home jobs. Help
child understand costs of working away from home. The child could list all
job related expenses and with parents decide on the realities of working
away from home.
The Teenager
- Provide monthly allowance and encourage planning and record keeping.
Evaluate plans periodically and make needed adjustments.
- Include the concept of savings and long-range planning.
Lesson 3
In our next lesson we will explore the concepts of saving and
sharing money.
This material was originally prepared by Joyce H. Jenkins, Extension Family
Resource Management Specialist, and Naomi H. Willis, Extension Instructor of
Home Economics, and is being used with permission of Clemson University
Cooperative Extension. Recommended to Arkansas by Wanda W. Shelby, District
Extension Family Resource Management Specialist, University of Arkansas
Cooperative Extension Service.
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