In the second part of our conversation with Dan Meader, we talk about how an allowance can serve as a learning tool. BlackEnterprise.com chatted with Meader about the new Allowance Manager app and how parents can benefit.
(Check out Part 1 here.)
BlackEnterprise.com: In your opinion, at what age should a child start to get an allowance?
Dan Meader: I think most parents don’t give their kids credit for being mature enough when they really are. I think as early as 6 or 7 is appropriate. I’ve watched Allowance Manager users of that age really thrive within the system with the knowledge and skills it imparts.
BlackEnterprise.com: What are some things children can learn from getting an allowance?
Meader: An allowance gives kids an essential experience with their own money. Understanding money is a skill, and like any skill it must be practiced often. And the only way for them to get practical experience is if you give them some money. Like any skill, if you want to be good at something — for instance, learning a new language or riding a bike — you have to practice. If you ride a bicycle or if you’re exposed to people who speak the language you want to learn, you pick up that skill easily. And the benefit of Allowance Manager is that it keeps parents honest. Many parents decide to start giving an allowance but never follow through with it.
BlackEnterprise.com: What advice would you give to parents whose children are mismanaging their allowance? For instance, what if they spend it all on candy and toys?
Meader: Well, whether or not your child is mismanaging his or her allowance is a judgment call. And the great thing about an allowance is that it provides a low-stakes environment in which to experiment with money. It’s like riding a bike. No one learns to ride a bike without falling off a few times. So blowing allowance money on candy is certainly equivalent to falling off your bike. Some children might learn a valuable money management lesson when they spend all their money on toys and candy, but then realize there is something else they want to buy. They will realize they don’t have the money because they spent it on something that wasn’t that important. That serves as a learning experience.