I was talking with the guy who introduced me to FDR the other day about parenting, and we started wondering about how to teach children how to handle money. I'm new to this forum, but I've been listening to FDR for about 8 months now, and I tried to do a search on this topic here on the forum before posting. I apologize if I've overlooked a previous discussion on this, and if any of you could point me to previous discussions that address these questions, I would be very grateful.
The topic we were considering boiled down to two main questions:
1. Assuming a child should get an allowance (feel free to debate that assumption if you think it incorrect), should that allowance be directly tied to contributing to household chores, or should the allowance be independent of chores - meaning that parents should teach that some work worth doing, especially within a home or to support family, isn't always going to have direct monetary rewards.
2. Clearly a parent should provide for all of a child's "needs;" the following question is concerning extra "wants" like a video game, a band tshirt, a first car, or a candy bar. If a parent has plenty of expendable income and can and does buy his child mostly anything extra that the child asks for, is the parent robbing the child of the experience of the allowance actually being a useful learning tool? If the child doesn't have to learn how to prioritize his "wants" or doesn't have to learn to delay gratification with money aka "saving up for something he wants more" then it seems his parents will have done him an educational disservice.
If this is true, then how should this hypothetical wealthier parent make sure that his child still learns these lessons? Surely hands-on active learning is preferred whenever safe/healthy, but if that's the case in this situation too, would the parents then have to make family rules to not buy certain types of "wants" for their child even if they can easily afford them, just to make sure that the allowance is actually teaching the child something smart about money, saving, and delayed gratification? What types of things should go on this "budget for it yourself if you want it badly enough" list, because I doubt if anyone would advocate that literally ALL of a child's "wants" should go on this list. Right?
This seems like something important to decide early and remain consistent on if it is the case. What do you guys think?