It’s hard to disagree with the idea that in life we trade one thing for another. We trade our time and energy for money. We trade our time and energy for food, water, shelter, protection, and a whole lot more.
In addition to trading ‘things’, we trade ‘ways of being’. Adults trade being good employees, being good spouses, being good citizens. Kids learn early on how to trade ‘being good’ for you letting them do certain things they want to do or buying them things they want or think they need. We move about our lives, and the planet, by trading things between us.
The next idea it’s hard to disagree with is that most adults also trade their times and energy for money which they then, in turn, trade for many of the things they need and want, including experiences. Most of the time money is a necessity for buying food, renting shelter, paying for health care and education; the things that make our lives convenient and enjoyable in one way or another.
Now let’s throw a wrench in the works. Let’s attempt to teach people HOW to trade their time and energy for money but NOT teach them how to USE the money wisely?
That’s what’s happening not just in the United States, but the world. The lack of financial literacy and basic financial skills among our population has put millions and millions of adults, young and old, into an entirely new version of debtor’s prison. Overcome by the ‘shiny object syndrome’ they use the ability to pay for things now with the intended promise to pay for said things later. Only problem is that between special rules that seem to apply to the credit card companies and adults inability to control their spending, the promise of paying later is happening later and later, or not at all.
Learning to fly
How does this apply to allowances and children? Simple. When you empower a child with the tools and information he or she needs to make wise financial decisions and choices early on in life, there is less likelihood that that child, now an adult, will be lured with the shiny object syndrome, and, because they are educated in the proper use of their money and other people’s money (aka OPM) as in the use of credit cards, it’s not as easy to get themselves thrown into their very own version of debtor’s prison hell.
Where the confusion starts for many parents is when they start asking ‘how’ to their children an allowance. Up until now there just hasn’t been an effective, step-by-step allowance method. Parents often try developing their own programs or do what was given to them by their own parents, but it can easily escalate into a continual battle between parent(s) and child and often time, parents simply either give up or give in. And neither of those options produce the result we’re looking for…financially responsible adults.
An allowance needs to provide several opportunities for the child:
- Experience with money, and a great deal of it at that.
- Practice with budgeting
- Ongoing lessons and practice with saving, spending, investing, donation money
- Ongoing and increasing levels of financial responsibility
- Motivation to begin making one’s own money
- Constant reinforcement of supportive money habits and beliefs
- The development of a powerful money blueprint*
The problem and challenge with most allowance systems or methods is that the money is too often tied to household chores and sometimes grades and other responsibilities, which are better left to be done, “because you live here and as long as you do, your share of the household duties includes making your bed, helping with laundry, taking out the dog and feeding the garbage (:-), etc.”
Another challenge many parents experience is they think they can’t afford to pay their children allowances that would make an impact. THIS is where the brilliance behind The Ultimate Allowance shines through.
You see, parents are already paying thousands of dollars a year to raise their children. By simply taking a portion of that money and running it THROUGH them instead, you provide them with the thousands of dollars worth of experience they need to grow into money savvy adults. Think about it. If the USDA claims it costs, on average, $275,000 to raise a child from 0-17 and you run just a portion of that money through them, don’t you think they will learn how to use it AS LONG AS you’re there to guide them every step of the way?
Exactly. And The Ultimate Allowance gives you step-by-step instructions on how to do this, what to say to your children, powerful allowance parenting tips and a whole lot more.
If you’re looking for a way to teach your children about money, give them an allowance. And if you’re looking for the only allowance system that works, makes sense AND saves you money, check out The Ultimate Allowance.
Note: The Ultimate Allowance is also available as a Kindle download from Amazon.
(* from T. Harv Eker, Author of #1 NY Times Bestseller Secrets of the Millionaire Mind).
It’s not a report, dude. It’s an article.