You’re A ‘Cruel’ Parent For Giving Your Child An Allowance And Not Telling Them Why
To me, the word “allowance” conjures up images of The Brady Bunch or some other outdated television show where the child is asking their parents for a raise to be able to buy a new comic book. I’m not sure how much kids allowance are still used today but I think the tactic can be a good way for kids to learn about saving money and being financially responsible. However according to a financial expert, just giving your child an allowance is not enough.
Lewis Mandell, financial expert and professor of finance at SUNY Buffalo, says parents who blindly give their children an allowance and don’t discuss the how’s and why’s are being “cruel.”
Mandell says in most cases allowance, as a tool for learning, just doesn’t work. He notes findings from a series of financial-literacy assessments by the Jump$tart Coalition for Personal Financial Literacy. These surveys show that high school students who receive a regular allowance test the poorest and exhibit the weakest behavior in personal money management. They are also more likely to be “slackers” as adults. Hence the cruelty assertion.
Mandell doesn’t believe that just the act of giving allowance is so bad. But if the parents don’t take the time to sit down with their children and have discussions about finance, they are doing them a disservice. Almost like giving a child a bike and not teaching them how to ride it. He also thinks that some parents use an allowance as a cop out so they don’t have to deal with their children asking for money all the time.
In most households, Mandell says, the top reason for giving kids a weekly allowance is to minimize the time they must take dealing with kids and money issues. On top of that, the parents generally aren’t qualified. “Most parents are themselves financially illiterate and pass down an oral tradition of misinformation,” he adds
Growing up, I was never given an allowance and I don’t remember my parents having a sit down with me telling me how to be financially responsible. But I don’t see my parents being cruel. However, the haircut my Mom gave me when I was eight which led people to think I was a boy for six months — that’s another story.