Children and allowances are a frequently discussed topic among parents. Should you give your children an allowance? Should children have to earn their allowance or is it given gratis? What’s the appropriate monetary amount to give a child? These are just a few of the questions that parents face when it comes to their children and whether or not to provide an allowance. This article sets out to provide some answers and insights to help you make the best decision for you and your child.
To Earn or Not To Earn
One of the biggest arguments surrounding children and allowances is whether or not a child should have to complete tasks, like specific chores around the house, to earn his or her allowance or if an allowance is just expected to be given to children by their parents. When it comes down to it, this is a chance to teach your children about money, and money is never free. Therefore, when it comes to an allowance it’s best to have your children earn it.
It’s important to remember that when you begin giving your child an allowance this is one of the first opportunities you have to teach your child about money and to prepare them for the real world, regardless of how many years down the road it is until your child will be on their own.
As an adult you know that money doesn’t grow on trees and just because you want and wish for money, that doesn’t make it appear in your wallet. Using an allowance system to illustrate to your children that in order to earn money they have to work for it is an important lesson to teach, no matter how young your child may be.
It’s also important to teach your child that they are a member of your family and household and with that comes certain responsibilities. What that means is that there are certain age-appropriate chores your child should have to do without being paid for doing them, such as making his bed or picking up her toys.
So if your child is already expected to do age-appropriate chores, how can they earn an allowance? Explain to your child that they are expected to complete some specific age-appropriate chores, but also have a list of chores that go above and beyond what your child is expected to do and allow your child to complete these tasks to earn money towards an allowance. For example if one of your child’s chores is to set the table before dinner, offer your child the chance to clear the table and do the dishes for the chance to earn money for his or her allowance.
How Much Is Too Much?
Much like basing your child’s chore list and extra duties on your child’s age and capabilities, the amount of money you give your child is based on an age-appropriate scale as well. A common formula that’s used is a dollar for each year of your son or daughter’s age. If your son is ten years old, he may receive ten dollars per week whereas your five year old may be given five dollars. If this seems like an idea that would work for you and your family this can be a great formula to use.
If you have a young child, maybe around three or four years old, it’s good to remember at this age a couple of quarters or a dollar will suffice as children are just beginning to learn about money, costs, and how the whole process works. Ease your child into the idea of money and how it’s used before upping the amount you provide.
If your child is older and you want to start providing the opportunity for your child to earn an allowance, then it’s a good idea to incorporate your child into the decision. Ask how much money they want to earn, explain what they have to do in order to earn it, and how much money you can comfortably offer them to earn.
The best advice is to take some time to decide what fits for your family and your budget and go from there. There is no right or wrong answer, but just what’s right for you.
Spend…and Save
An allowance offers children a great way to be able to have money to purchase items with the money that they’ve earned, but it’s also a great chance to teach children about how to save money as well. Saving and budgeting money are great skills for children to learn and will serve your child well long after they are too old for an allowance.
Teaching a child to save money also teaches a child patience, consideration and to not always give into instant gratification; a hard lesson to teach in the technology-filled, fast-paced world in which we live. If your younger child wants an expensive toy and it’s too far out from a birthday or holiday, teaching your child to save his allowance shows your child that by saving money, they can get what they want. Just because you have money doesn’t mean you have to buy something with it right away.
An older child may want to attend a certain event or concert. Perhaps you can strike a deal that you’ll pay for half the ticket if they can save their allowance to purchase half. Having an allowance to budget and plan is a great lesson and experience for your older children and teens to have while at home. This is a perfect opportunity for you to share your thoughts and lessons on money and money management with your kids.
The Payout
Ultimately the decision to give your child an allowance is up to you. Is it a system that would work well for you and your family? If so, there are many benefits to providing an allowance for your son or daughter and if you decide to use an allowance system in your house, make sure to take full advantage of all that your child can learn about how to earn, spend, and save money. An allowance for a child, if done with thought and preparation, can be a great teaching tool for your child to learn about money.
