Should I give my Children an Allowance?

Deciding whether to give your children an allowance can sometimes be a tricky decision and sometimes an easy one. It will partly depend on whether you can afford it but also whether you feel it is the right thing to do. It is worth thinking through the different sides of the argument before you decide.

Can you afford it?

It is worth making sure that you can afford to give them money. You do not want to have to take out a loan just to give your children some money. If they are good children, they would not want that to happen either. If you need the money to pay for essentials then you should spend it on those instead. If the children want money then you should be able to explain to them why you need to keep the money to buy things for you and them. If you find that you can sometimes afford it but sometimes not then you can explain that to them and give them a bit when you can or when you think that they really deserve it.

Should the children earn it?

Some parents feel that children should earn their pocket money. They feel that it is good for them to get used to the idea that they need to work if they want money and that they will not just get away with being given money without having to do anything. However, other parents feel that if you pay children to do chores, then they will never do anything without expecting to be paid for it. That means when you need a bit of extra help or when they have their own place to look after, they will be reluctant to do it because they cannot get any money for doing it. It could be better to give them chores to do, as they should help and start learning about what needs to be done in a house, but the allowance is not given to them as a reward but extra.

Do they deserve it?

It is also worth thinking about whether the children deserve it. Maybe rather than giving it to them as a reward for chores, perhaps behaviour could be a factor. If they are behaving well, then maybe that good behaviour should be rewarded but if they do not behave well then they do not get a reward. Again, like the chores, this could have some problems with it. Children may feel that they only need to behave well if there is a financial reward to be had if they do and so it may stop them behaving well in situations where there is not a payment. However, it might help some children to behave better.

Will it teach them anything?

It is good to think about what giving the children money will teach them. Some children ill only learn that they can get money regularly to spend on whatever they like and that is great fun. Others, might learn about saving money, if they decide not to spend it all or about saving up for things if they want to buy something a bit more expensive. It can also teach them how much things cost if they use the money to buy things for themselves. However, it can also teach them that parents give out money for free. This might be something they expect to get for the rest of their lives and could mean that they become very reliant on their parents handing out money to them rather than managing themselves and making sure that they become self-sufficient when it comes to money.

Some parents try to enforce rules on the way that the children use the money in order to help them to learn. It might be that they make them save all of the money so that they have a pot of money for when they are older. It might be that they will make them save half of it and spend half so they do learn about savings but they still have some money to have fun with and also to learn about costs with. Some will let them spend as much as they like and hope that they learn about spending money and that once it is spent then it is gone, so they hope they start to make sensible spending decisions. Some parents might even give their children a really high allowance but make them buy their own clothes, toiletries etc with it. Then they will really learn about budgeting. So, there are different approaches that parents can take which they can use to help their children learn more about having money by having an allowance.

It can therefore be a tricky decision. It may depend on the personality of your children and their age. You will be able to judge what impact having an allowance might have on them. If your children are different ages and have different personalities then this could be even more difficult. However, you should know them well enough to be able to decide. You could even trial giving them an allowance for a while and then decide whether you feel it is something that you want to continue with or if you feel it should be stopped.

Is Insurance Worth the Money?

Many of us have insurance for all sorts of different things. It might for our healthcare, travel, car, belongings or other things. We will normally have to pay money each month for the insurance and sometimes it can feel like we are just paying money out and not really seeing much in return. It can therefore be worth working out whether we really need all of the insurance that we have.

Consider what it is for

It is worth starting by thinking about what the insurance covers you for. Some insurance might be more important than others and so it is good to take stock and think about this so that you can cancel any that are not that important. Having health insurance will allow you get medical care and you may feel that this is essential, for example. However, you may decide that having life insurance so that your children get a pay-out is less worthwhile as you could put that money into a savings account each month and soon have enough for them anyway. Think through each one and decide whether you really think that having them is necessary.

Could you afford not to have it?

As part of this process think about how you might manage without the insurance. Consider how you might cope if you were to be in a situation where you might have needed insurance but you did not have any. For example, could you cope with cost of medical care, replacing possessions if they were stolen, repairing your car if it was involved in an accident or things like this. Consider what each insurance policy you have is for and whether you could manage if you did not have them. You may have to turn to a loan otherwise.

How much will you save if you cancel

It is also worth thinking about how much money you will save if you cancel the insurance. You will probably be paying a monthly amount or a lump sum annually. If you did not pay out that money you would be better off and it is worth considering how much better off you will be. Think about whether you could perhaps put that money into a savings account and how soon it will add up so that you would have enough to fall back on so that there would be no need for you to need the insurance.

Is the peace of mind worth it?

Insurance gives many of us peace of mind. We know that if we have the insurance it will mean that we will be able to draw on it should there be a situation where we need it. Knowing it is there can be really helpful for many people and they do not have to worry if they do not have savings or things like this. Think about whether you get this benefit from your insurance and whether it will make you feel uncomfortable if you no longer have it.

Can I get it cheaper?

There are many insurance companies and so an alternative way to cut down on the cost of insurance is to find cheaper cover. Although getting rid of unnecessary cover is important, there is likely to be quite a few insurance policies that you will want to keep. Therefore, you will need to think about how you will get the cost down of those that you do have. If you compare different providers you will see that the costs can vary quite a bit. This might be because they offer different levels of cover, but it may also be just because some companies are more expensive than others. Do some research and find out which are cheaper and see whether you can take on a cheaper one and still benefit form the amount of cover that you need. It might be that you are paying for more than you need or that you are paying more for the cover that you want than you need to. It is good to spend some time doing this because you could find that you will save money on each insurance policy that you have and these savings could add up to a significant amount of money. Just make sure that you read reviews and are confident that the insurer and the policy will provide you with a good service and give you what you are looking for in insurance cover.

It is worth reviewing your insurance cover every year or so to make sure that you are getting the cover that you need at a competitive price. It does not take long to switch insurers and you could end up saving a significant amount of money. It will take a little time, but the more often you do it, the easier it will become and you will be able to get through the process quickly.