Allowance is part of financial education, says EAESP professor

Everyone lives with financial limitations set by their own earnings. Why not place children in the same reality? encourages Gallo, demonstrating that the allowance is a way to teach children and young people to live on their own resources.
Institutional
06 January 2014

Paying an allowance may assist in the financial education process of children, says the professor of São Paulo School of Business Administration (FGV/EAESP), Fábio Gallo, in his column Seu Dinheiro, in the newspaper O Estado de São Paulo.Everyone lives with financial limitations set by their own earnings. Why not place children in the same reality? encourages Gallo, demonstrating that the allowance is a way to teach children and young people to live on their own resources. The expert also points out that it should not be mistaken as a reward for completing tasks. Household chores, such as making one's own bed, are responsibilities as part of the family and should not be the object of remuneration, he explained.Still according to the professor, many factors must be taken into account when stipulating the value of the allowance, such as expenses of friends and total spending on hobbies, trips and snacks.  Furthermore, what remains on the account of the parents and what must be paid with the allowance should also be established - which can be achieved through an agreement and must be respected. Once the value of the allowance is set, parents should not give extra money to children, a fact that creates bad habits, advises Gallo.

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