Paying Children

Many people who have written on the subject of allowances say it is not a good idea to pay your child for work around the home. These jobs are a normal part of family life. Paying children to do extra work around the house, however, can be useful. It can even provide an understanding of how a business works. Allowances give children a chance to experience the things they can do with money. They can share it in the form of gifts or giving to a good cause. They can spend it by buying things they want. Or they can save and maybe even invest it. Saving helps children understand that costly goals require sacrifice: you have to cut costs and plan for the future. Requiring children to save part of their allowance can also open the door to future savings and investing. Many banks offer services to help children and teenagers learn about personal finance.