Talk about an incendiary headline: “Expert: Paying Kids Allowance Is ‘Cruelty’”
And this is from Time Magazine, no less!
Well, dig a little deeper and you get to the real story: some parents are using the unconditional allowance as a way to avoid having discussions with their kids about money. Among parents who had good financial discipline, and talked to their kids about money, the practice of giving an allowance was not found to be harmful.
The problem is the other 75%, where there is less emphasis on higher education, and working parents have little time for the kind of discussions about money that should accompany an allowance. 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.
The solution, of course appears to be that it’s necessary to recognize the importance of teaching kids about money – even if we didn’t learn those lessons ourselves when we were kids. It’s also vitally important to engage in conversation if you want your kids to grow and learn sound financial principles.