(NBC News) – (10/2/19) Most parents are okay with a weekly allowance, if kids are on top of their chores, but the fear of making the wrong decision on allowances is why the old debate rages on.
“There really isn’t a right or wrong,” says Cleveland Clinic psychologist Dr. Vanessa Jensen.
Jensen says allowance help kids understand how to manage money.
Bill Dwight got so serious about educating his five children about finance he founded FamZoo.com, and developed an app and prepaid cash cards that handle allowance deposits and withdrawals.
“My objective was to help parents teach their kids the basics of personal finance,” Dwight says.
To get there, parents have to first get past whether to offer an allowance at all.
“Be clear what the allowance can be used for, and what can’t it be used for,” Dr. Jensen advises.
She adds that even if not tied to chores, allowances should be conditional.
“Some parents will have allowances that they say upfront, whatever I give you 10 percent has to be saved for charity or a certain amount must be saved in savings,” she explains.
That way, allowances also allow for an education.