5 Mistakes Parents Make When Giving Their Kids An Allowance | Refresh Financial

Official blog of Refresh Financial

5 Mistakes Parents Make When Giving Their Kids An Allowance

piggy bank

I’m not sure if it’s just me or if parents are not giving their kids an allowance anymore. It seems these days that the overwhelming majority of kids don’t get regular spending money from their parents. Instead, they seem to just be bought the things they want, or given them on birthdays or holidays.

It’s a shame because giving your kids an allowance is probably the best thing you can do at a young age to give them an education about money. This is a topic that is sorely lacking in the public school system, and even in many private school curriculums. If your child is going to learn about money, it’s going to be from you. I can’t stress enough that giving your children an allowance is a great thing to do.

If you do give your kids an allowance, good for you! You’re one step closer to having money-smart kids who will grow into financially secure adults… you know, the sort that don’t call every month asking to borrow money to make rent. Your kids have a better chance at becoming independent because you’ve stuck to a regular allowance. It is a promising first step. The next step, however, is making sure you’re doing it the most effective way.

Here are five mistakes parents often make when they give their kids an allowance:

1. Not expecting your kids to work for it

Wouldn’t it be nice if money came out of thin air for everyone? For some of us, we learned this too late. Don’t doom your kids to that fate. Teach them at a young age that money comes from hard work, and rarely does it come from anywhere else. Give them a few chores, while being careful to remember that they are still children and perhaps reshingling the roof isn’t the best “chore” for them. If they do their chores as expected, every week, you hand over the money they have rightfully earned. With it comes a sense of accomplishment and good habits are being formed.

2. Paying them for things they should be doing without reward

Things like putting their dishes in the dishwasher, or putting their clothes in the laundry basket, or picking up their toys after them. These are all things that should be expected of them with or without pay. One thing that parents often pay their kids for is babysitting their siblings. Is this really something that should be rewarded, or should family just be expected to take care of family without the promise of a twenty dollar bill? No, give your kids chores like cleaning the bathroom or taking out the trash. Pay them for weeding or doing the laundry. Don’t pay them for things they should be doing just to meet the basic requirements of being a contributing member to the household. They’re not going to get paid for cleaning up after themselves when they’re older, so why teach them to expect that now?

3. Giving them too much money

You remember when you were seven years old, way back in the pre-internet days, asking mom and dad for another quarter to play the pinball machine at the mall? Mom would always wag her finger while repeating the same old mantra, “money doesn’t grow on trees, you know!”. Barely into your adulthood, the reality that mom was right smacked you in the face like Mike Tyson’s left. Giving your babies too much money might take away the opportunity they have to learn how to budget and save.

4. Giving them too little money

The amount of money you give your kids needs to be a motivating amount. If it’s too little, they won’t care if they earn it or not, because it’s really not enough to do anything with.

5. Buying them a piggy bank

If they’re old enough to save money, they’re old enough to do it in a savings account. Take your kids to the bank, open them an account and use this opportunity to teach them about banking, saving and interest.

Teaching your kids about money isn’t all that hard, if you’re consistent, fair and expect them to give as much as they get. We all have that urge to spoil our kids, pouring gifts on them every chance we get. We have to resist this urge and look forward to the excitement of watching our babies grow into savers with good credit and financial independence.

Are there any mistakes you’ve seen parents make when giving their kids an allowance? Let us know in the comments!

Leave a Reply

Your email address will not be published. Required fields are marked *


1 + 2 =

    What Canadians are saying about Refresh

    I would like to thank Refresh Financial for helping me get out of a bad spot. I never thought it was possible and almost gave up on things and then I saw Refresh Financial and and gave it a try. At first I was unsure of things but to see my credit score now makes me a believer in this program.

    – Aaron A

    “It hasn’t even been a year yet, possibly only 6-7 months, and my TransUnion score has gone up over 100 points. That was only the tip of the iceberg as recently I was able to get a consolidation loan from my bank that allowed me to move forward and make things easier for me. Talk about second chances!”

    – Angelica M

    “I am now in a position where I am able to obtain credit (just bought a brand-new car and refinanced my mortgage for a fantastic rate) and it took little to no time at all. I would 100% recommend Refresh to anyone looking to rebuild credit with as little hassle as possible.”

    – Cathy M

    “I had not heard of a company doing such a thing before someone suggested it to me and it made sense. I am not very good at saving money and Refresh Financial helped me. I have dealt with them for years now and never had a problem. The customer service is excellent and fast.”

    – Chris C

    Refresh helped me regain credit following a nasty divorce, which left me with a very poor rating. They were able to remarkably help me go from a 480 to a 600 score, in just over a year. Thank you Refresh!”

    – Deb K

    I have watched my credit score jump since being with Refresh and I have already recommended it to friends and family. Thank you for helping me build my credit faster for my future and my children’s future :)”

    – Heather T

    At first I was skeptical because I wasn’t getting funds upfront and had to make payments when I really needed the money. I’ve been in the program a year now and have noticed my credit has improved drastically!”

    – Irene L

    I have been a client of Refresh Financial for approximately 3 years. Since being a client they have improved my credit immensely. Definitely recommend this company to anybody that needs help re-establishing credit.”

    – Jason I

    “I recommend this program to anyone having credit issues. At the end of the agreement, your money is refunded to you. There were times I found myself short on cash and Refresh, with permission, used a portion of my money to clear up my arrears.”

    – Margaret L

    “I would like to thank Refresh Financial for their professionalism, great customer service and for helping get back to a better financial situation. I have always been treated with the utmost respect.”

    – Martine B

    Refresh Financial is an amazing program to help people get back on their feet. I was rock bottom with nowhere to turn. My credit was beyond poor. I would recommend them to anyone. If I can do it surely anyone else can.”

    – Matthew S

    “Great company to deal with for rebuilding credit, very simple process to get started. Good service if you ever have questions.”

    – Mike L

    This business truly cares about its clients. The customer service is always quick to return calls or emails. Their online portal functions very well so as a customer you are always updated as you progress with your loan.

    – Phil J

    “Refresh Financial has made us more aware of how to take care of our financial situation and be more responsible, and making payments on time is rewarding in the end for credit. Thank You sincerely.”

    – Rocky M.

    “Refresh financial is great!!! They boosted my credit score, helped me save money and helped my husband and I buy our house;) I was not only a number to them, they stayed in touch and helped me out along the way. Answered all my questions and concerns.”

    – Sara B

    “Refresh Financial had been exceptionally good to me! I’ve just been out on medical leave and they have accommodated me with my payments without hesitation!! I was in a really bad spot with my credit and they have helped me to try and correct it!! Bravo!”

    – Shannon B

    This company has been nothing but fantastic. They have gone above and beyond to help me. This program has given me the relief and peace of mind I need. I would certainly go back to them and give them names of people who could use this.”

    – Shirley K

    The financial services products are excellent for new immigrants, low-income earners and small business owners. Loans, savings and credit building all in one solution is a perfect fit to help with financial goals and stability.”

    – Soraya H

    “After successfully going through a credit rebuilding loan, I was able to use my built-up equity to purchase a newer vehicle and I have since been approved through a financial institution for a loan.”

    – Tanya W

    “I made some poor credit choices when I turned 18 and have always had this lingering thought of how am I ever going to better my score. Since being with Refresh I have realized that I took the right step towards bettering my future.”

    – Taylor B

    “Thank you Refresh, and my relationship manager for giving me the tools for a better score with a secured card and two credit builder loans. I feel absolutely confident I’m on a better path to financial success. I am happy to be a long term client.”

    – Trevor P

    I’m so excited I’ve joined refresh! I’ve already seen a huge increase on my credit after the first month! The staff are a delight and make this so easy to understand. I strongly recommend Refresh Financial even if you have good credit this will give you a boost and you’re saving money with the reverse loan!”

    – Wayne B