Have you ever had the feeling that you are being nudged from the front, pushed from the back and gently banged on the head to the point that it’s time to write an article? I had this experience last Monday.

My schedule was full as I started my day in Jerusalem. I had several appointments, including client meetings and an evening workshop at the AACI (the Association for Americans and Canadians in Israel) on Cultivating a Mature Relationship with Your Money.

I routinely check my messages before leaving home, and in doing so I spotted a question from a member of the Art of Money community, where I’m a teaching assistant this year. The questioner sought feedback from parents of teenagers and asked how these parents use allowances to educate their kids about money (nudge).

Later that day, I met my friend and Intuitive Eating Coach, Rena Reiser, for lunch. During our conversation, Rena asked me my opinion on paying children for doing things around the house; not chores per se, but for tasks such as keeping a clean bedroom (the push).

The same topic then came up for a third time that day during a meeting with a retired couple. During our discussion, they brought up the topic of supporting certain children and grandchildren who just weren’t making it on their own (bang).

As a parent of three children in their twenties, three teenagers, and two pre-teens, I got to thinking about our role as parents. We all understand that as parents we’re responsible for educating our children and guiding them through the process of acquiring the skills, knowledge and values they’ll need to be healthy, productive, moral members of society.

Ultimately, we need to prepare our kids for a successful launch into adulthood.

So if a successful launch is the objective of effective parenting, how do we define and measure the accomplishment of this goal? What skills and values must we pass on to our children? And how do we do that?

Answer: we lead our children by example.

We all know that if we expect our children to read, we set an example by spending time with a good book. If our goal is to raise independent children, we exhibit independence in our own lives. If we want our children to learn work ethic, they need to see this quality in their parents.

And if we expect our children to understand the value of money, they should have the opportunity to observe how it is earned, how it is saved, and how it is responsibly spent.

Psychologists call this Observational Learning, i.e. the indirect learning that occurs through the process of watching and imitating others. A parent models behavior to her children and the children copy it.

And just as observational learning can prepare a child for a successful future, it can also model unproductive behaviors if the parent exhibits lack of motivation, poor morals, bad work ethic and lack of money management.

Another way children learn skills and values is by directly experiencing cause and effect. We have a running joke in our home that our kids learn about gravity by throwing things off the high chair. And as a result, they’ve never jumped.

More than once.

In all seriousness, though, when children feel the natural consequences of their behaviors, they are more likely to develop the internal strength and resilience necessary for a successful launch. So when children are given the opportunity to earn their own money, they gain first-hand experience in being responsible for a task in exchange for a monetary reward. And they learn how to measure and evaluate their money habits and spending decisions by differentiating between needs, wants and desires.

Many years ago my friend Miriam shared with me the story of her teenaged son who keenly wanted a certain pair of expensive, name-brand shoes. Since it wasn’t in the family budget that year, this enterprising young man took on a summer job. He worked hard while his friends lazed around at the beach and by the end of the summer he had amassed a very respectable sum. So what do you think this young man did at summer’s end? Dash straight out to the shoe store?

Nope!

At the end of the summer, this enterprising young man chose to save his money. He had spent his vacation working hard and learning a strong, crystal clear lesson about money, values, and choice.

Success!

When parents simply hand their children an allowance expecting nothing in return, they teach their children entitlement. And the children are likely to grow up expecting instant gratification and being challenged to differentiate between needs and wants. And that is not behavior we want to promote.

So now let’s circle back to the beginning. Is it OK to give a child an allowance as a payment for doing chores? Not in our house. We believe that contributing to the family and to the upkeep of the home, including dishes, laundry, cooking, and cleaning, is a super important value (not to mention the life skills acquired in the process). We all pitch in, help and pull our weight because it is our home, our sacred space and we take pride in it.

Have I never paid my kids to help around the house? On a rare occasion, yes. Like about once every three years. And I will occasionally sponsor a two or three-week challenge to encourage my children to do some extra reading or learning in exchange for petty cash. But big bucks….my kids have to earn ‘em through “true grit.”

Before I close, let’s talk about what happens when parents step in to rescue their children by providing regular and continued financial support. Speaking generally, rather than to the specifics of an individual situation, and understanding that most parents have the best of intentions, the inadvertent consequence of rescuing our children is that we rob them of a unique opportunity to develop resourcefulness and resiliency and to discover their own strengths. We inhibit them from learning how to solve their own problems and to apply the lessons of cause and effect. Our children remain, well, children who may be ill-equipped to tackle challenges as adults.

I wish there was a magic formula for raising children to succeed in adulthood. We all want the best for our children and look forward to successfully launching them on to their own two feet. But short of abracadabra, I think our best chances for parental success include being a good role model, showing our children the value of cause and effect, and allowing them to make mistakes.

With dearest blessings for successfully launching your children and lots of cuddles from the grandkids!

P.S. If you could use some support modeling good money behavior, I encourage you to reach out.

why we dont give our kids an allowance

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