Allowances Around the World
Updated: Aug 4, 2019
Imagine being 7 years old having to choose between buying a piece of candy that is nearly in the grasp of your hands or that expensive toy that you saw in a commercial that you will have to save a month’s allowance for. Of course, you’re going to go for the candy because you can taste the rewards right away! Then when the candy is all gone, you will be wishing you would have just saved the money for the toy you had really want. Then you are reminded of your poor choice whenever you see the toy commercial. This is why financial literacy is an important tool to learn early on. However, not all parents use this same method for teaching their children about money management. While we all want our children to be fiscally smart, every family goes about teaching it differently. Here are a few different allowance traditions seen around the world:
1. United Kingdom
Some parents in the United Kingdom like to start teaching their children about money management very early. As many as 44% of parents start giving their children a weekly allowance at ages 4 to 5, according to a survey done by Money Advice Service. This gives kids plenty of time to make mistakes and learn that it is possible to save up! It’s better to make poor money decisions when it comes to candy and toys rather than making big mistakes on home loans and credit cards.
2. The Netherlands
Many families in the Netherlands like to incorporate a more in-depth approach to weekly allowances. Not only do they reward their children for doing chores around the house, but some also like have a little more control over their kids’ spending- encouraging children to spend on things they need or donate a fraction of their allowance. This becomes a more realistic guide to learning about money. If only we could just spend our money on the things we wanted! This help kids differentiate between needs and wants. They also make sure to give their little one’s advice on saving, like how much to save over a certain period of time.
Parents in Asian countries give a little more spending money to their kids as they get older. This tradition is centered around the fact that kids gain more knowledge about money when they learn more math skills. The learn to understand cause and effect of money a little better. Young children, usually around 4 or 5, can receive $2-$5 a week. Older children can receive $5-$10 a week, after they have learned the importance of saving and donating. Teaching kids to donate helps put things in perspective for them. Not only do the learn about empathy but also the importance of helping. This will show them how to be grateful for the things that they already have.
4. South America
Even though South American countries like Brazil and Chile are emerging economies, they have some of the best rates of financial literacy in children in the entire world! Parents in South America, much like parents in the Netherlands, talk to their children about saving, spending and budgeting. In South American families, particularly in Mexico, they talk about finances on a pretty regular basis. It’s also important in South American countries that kids learn about money and finances in school as early as age 9. Kids get a weekly allowance for chores as wells as lots of advice on how to manage their money wisely.
Allowance traditions in different places may have the same basic concept, but the way it is approached is much different. By taking a page out of the kid’s allowance handbook of the world, we can teach our children to grow up to be strong budgeters. Learning about money early on is important to so many parents around the world and guiding them to be smart spenders is very common. By making learning about money a priority along with the traditional weekly allowance, you can help your little ones to become smart spenders, too! Giving your children the skill and knowledge to handle money is a great way to ensure that they will be financial independent in the future. No parent wants to support their child financially forever. We rather be spending our money on our awesome retirement….and spoiling our grandchildren.