WASHINGTON — I went to live with my maternal grandmother, Big Mama, when I was 4. And at 4, I stepped into her financial class.
“Big Mama, can we go to McDonald’s?”
This question and every other similar request to buy me anything that wasn’t a necessity were met with a money lesson. Every. Single. Time.
That’s how I learned to be a good money manager. Big Mama talked incessantly about saving, spending wisely and staying out of debt.
I watched her manage on so little and still pay all her bills on time. Big Mama was so tight with her money that if she held a penny, Lincoln would scream.
Hands down, this woman taught me more about money management than any financial expert I’ve ever met or interviewed. And she did this without ever giving my siblings or me an allowance. Big Mama couldn’t afford to have us on her payroll.
So, whenever parents ask me if they should give their child an allowance, my answer is: It’s not really necessary. I’m not saying it doesn’t help, but the absence of an allowance doesn’t produce spendthrift children either.
During a recent online discussion, the question came up about whether an allowance is the key to teaching children to be financially responsible.
“Having an allowance to manage on their own provides real practice in an environment where you can help them learn from their mistakes!” one reader wrote. “My daughter had an allowance tied to her age until the day she left for college. She was expected to pay for social outings and all of her ‘wants’ with it. No money, no movie with friends. And we also never tied it to chores. Allowance teaches you how to manage money; chores teach you how to manage your life, take care of yourself, and be a good housemate. …read more
Source:: Deseret News – Business News