There is often debate among parents as to what their kids should or should not be expected to pay for. While the answers depend on the age of the child and are personal to each family, here are some factors to consider:
First, you will need a child that has their own source of income. Whether it is an allowance or income earned from a job, there needs to be a way for them to pay for items with their own money.
Secondly, a decision should be made as to what lesson is being taught. Some general lessons are:
- How to divide money between saving and spending
- Importance of setting a budget and how much things cost
- The decision-making process for prioritizing expenses
- Responsibility and care for purchased items
Each of these lessons plays a role in determining what children pay for with their own money.
Some examples of what children can pay or help pay for include:
Birthday presents for friends. If a child has been invited to their sixth birthday party in two months, this becomes expensive for the parents. It's a good opportunity to work with a child on setting an overall gift budget for the year, then deciding what to buy and how much to spend on each friend.
Clothes or entertainment. Parents will buy basic clothes and other necessities for their children. The question becomes should the child pay for brand name clothes, or the extra purse, or the extra entertainment out of a pre-set budget?
Lost items. Maybe the parent paid for the original cell phone or hand-held electronic game, but should they pay to replace the item if it is lost due to carelessness?
College tuition. Post-high school education is expensive and parents should consider whether they will require their children to work during college. This may be during school, summer only or simply weekends. It depends on each family’s personal situation. Some studies have shown that kids who keep a job through college graduate with better grades.
However a parent chooses to do it, allowing children to manage their own money and make financial choices will benefit them tremendously in the future and teach them critical life-long financial habits.
Peoples State Bank, Member FDIC