Read / Articles /

Why I Don't Pay My Kids an Allowance

Money | Grant Botma | 4 mins

(This article was originally published by Grant on the Stewardship blog here.) 

I love my kids like crazy. Like most parents, I would do absolutely anything for them. As a result, I understand why many parents choose to give an allowance to their kids. You want to provide for them. You want to give them a head start. You want to teach them how to manage money. You want to do all of these things and more. Why not provide some of the resources you have to help give them the experiences you desire for their life?

Earning an income is the most important piece of personal finances. 

There is a lot of value in teaching your children how to behave with money. Teaching them to make wise choices when they purchase, teaching them to have sound judgment when considering going into debt or making other financial commitments, creating within them a habit of putting money away or saving for the future. These are all precious traits that can lead to financial literacy and financial success.

However, you cannot do any of these things without income. You can’t purchase items, you can’t choose to pay back debt, and you can’t save money without first having an income. As we’ve mentioned before on
this blog, income is an essential part of your finances. Therefore, I need to teach my children how to earn an income.

In my opinion, providing an allowance for my children would steal from them this opportunity. It could stunt their growth on the journey to financial maturity and play a huge part in their inability to build wealth in the future.

What I do Instead:

It’s not enough to deny my kids an allowance. I must take a proactive approach to teach them how to earn an income. Here are three steps that I follow when parenting my children as it pertains to finances:

The money they earn buys things.

You know those moments when you’re walking around the store with your children, and they ask if you could purchase something for them? I have a canned response when this happens to me. By this time, my children know exactly what I’m going to say, yet they still ask. When they ask, “Daddy, would you buy this for me?” I respond with, “Do you have money?”

Of course, I buy my children gifts and from time to time, purchase for them the items they asked for. But as a whole, my children know and understand if there is an item, activity, or experience they want, they can get it if they have the money to purchase it.

Money comes from work.

When I ask, “Do you have money?” they respond with “no….” So the next thing I say is, “Where do you get money?” And they respond with “Work.” It is a theme and a lesson I have repeated since they could start talking. If you want money, the best place to find it is at work.

Find a need and fill it.

What is work? How do you earn an income? Look for needs around you and fill them. This is the heart of every business. The employer you work for is filling a need somewhere in the community. If you own a business and provide a product or service to others, you fill a need. In a capitalist society like we live in, income is earned by finding needs and filling them.

From starting a business, to getting a job, to earning a promotion at your current employer, it all has to do with finding needs and stepping up to fill them.

The most successful way to fill needs is with genuine selflessness. Practicing the above with my children helps them think about others before themselves. It is wonderful!

Are you a bad parent if you give an allowance to your kids? No! But, as a financial expert, I know that income is the most important thing in an individual’s personal finances. As a result, I try to create an environment in my home where my kids can understand this fact and learn how to earn an income of their own. 

For me, this means no allowance.

Written By

Grant Botma

Husband, Dad, and Sun Valley Community Church student ministry volunteer. A Finance Expert and Founder of Stewardship. Christian Ministries major from Arizona Christian University and bestselling author.

Published on Nov 2, 2021