Buzz
There are many reasons to provide children with allowances. Giving them the chance to earn and manage small amounts of money helps them learn valuable lessons about budgeting, saving, spending, and donating.
Additionally, in households where allowances are tied to chores or where extra money can be earned by completing specific tasks, children get a sense of receiving fair financial rewards for their hard work.
However, it’s equally important to teach your children what it feels like to be in debt.
On Medium, Julie Morris shares why she made the decision to let her 8-year-old daughter go into debt to buy a pair of shoes:
I’ve never allowed them to ‘borrow’ before. How will this impact my eldest daughter? Will she feel the weight of the debt from those sparkly new sneakers that she couldn’t afford yesterday? Will it take away from the excitement of wearing them to church tonight? It’s possible.
I hope it takes some of the joy out of her weekend.
While the notion of deliberately ‘taking away joy’ from your child’s weekend might sound harsh, there’s a deeper lesson here. By making her daughter work extra hours over the weekend to pay off the debt, Morris is teaching her 8-year-old what it feels like to work for money that’s already been spent.
Or, as Morris herself explains:
I hope she comes to dislike earning money that she’ll never actually see. I hope she regrets buying those shoes with every single chore she has to do today!
Now, you know your kids better than I do—there are likely some children who wouldn’t mind working off a debt, and it’s not uncommon for kids to try negotiating an advance on their allowance at some point.
As your children grow older, they’ll begin to notice how you handle debt, whether you use a credit card for purchases or make monthly car payments, and may come to realize that some debts are more beneficial than others. Whether we like it or not, many of us use debt to improve our lives—it’s only when those debts become unmanageable that problems arise.
However, teaching an 8-year-old that borrowing money today means extra chores tomorrow is still an important lesson.
Whether it drains the joy from the weekend, or whether they look at their new shiny shoes and decide it was worth it.
