Our son just turned 8 years old. Is it time to start giving him an allowance? — Dan
There’s never a time for an allowance, no matter the child’s age. In my mind, that kind of thinking is the best way to plant the seeds of entitlement. You want your son growing up with the idea that he’s owed money simply because he’s alive.
Instead, work out a plan to pay him commissions. Assign him weekly chores that are age-appropriate. Then, when the work gets done, he gets paid. And guess what? If the work doesn’t get done, he doesn’t get paid! Not only do we want to teach a healthy work ethic, but we also want him to learn that work creates money.
Of course, there are some things a child should be expected to do without financial reward. Everyone needs to pitch in and do certain things to help out when they’re part of a family. But once you’ve taught him about work, make sure to also teach him about the three uses for money—saving, spending, and giving.
Lessons on the basic handling of money are some of the best teachable moments you can have with your child. Not only does it make them more knowledgeable about finances, it helps them learn about life! — Dave