Is it okay to give very young children an allowance?
Teaching kids there’s an emotional connection between work and money is one of the best things you can do as a parent. Once your kids are old enough to do a few simple chores around the house, they’re old enough to earn a little money doing them.
In my mind, there’s absolutely nothing wrong with putting kids who are three or four on a basic commission system. If they do the jobs you assign them, they get paid. If they don’t do the jobs, they don’t get paid. We put a little dry-erase board on the refrigerator, and listed the jobs they had to do during the week with a dollar amount next to each one.
Keep in mind, kids shouldn’t get paid for every little thing they do around the house. Some jobs are just a necessary component of being part of a family. And there are some things kids should do simply because mom or dad asked them to. Some jobs should have a higher purpose in mind, too, because as a parent, you should want to find as many teachable moments for your kids as possible.
Once they’ve earned their money, sit down with them and divide it into three separate envelopes—saving, spending, and giving. That way, they get to learn about the uses for money while they’re learning how to work!
Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 16 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.