Giving your child an allowance can go a long way in helping your child develop a healthy relationship with money and some money management skills. Here are a few tips to ensure your child will benefit from getting an allowance.
Should my child get an allowance? If so, how much? Is giving my child an allowance like paying them for doing their chores? At what age do I start giving an allowance? These are all questions a parent might ask when considering giving their child an allowance — and are apt to return as many different answers as there are parents who respond. (Debating the merits of an allowance is popular among parents!)
As parents, we want to raise smart children that grow into responsible adults. So, how can we give them a head start when it comes to money management? Many parents will agree that doling out a weekly allowance is great way to start. Here are a few tips to help ensure your child will benefit from getting an allowance.
Set some expectations
If you give your child an allowance for doing their chores, you will be helping your child to understand the value of working for a living; however, like many parents, you may consider chores to be a family obligation and an allowance a separate entity. As a parent, it’s your choice to give an allowance freely or in conjuction with chores, but either way, set up some expectations; it’s important for your child to understand what the allowance is to be used for. Here are a few things to consider.
- Encourage your child to save a portion of their allowance by setting up a savings account or by having them deposit their money into a sealed piggy bank. This will allow them to have a “rainy day” fund or save for a big purchase later on.
- Discuss what the allowance is to be used for. Depending on the age of your child, you may have them use their allowance for things such as clothes, birthday presents or school lunches as well as their own personal spending money. Make sure your child knows the expectations so they can plan their spending appropriately.
- Consider encouraging your child to donate part of their allowance to the charity or religious institution of their choice.
The amount of the allowance
This can depend on a number of factors.
- What is your budget? How much can you give your child per week?
- What are the expectations behind getting an allowance? If you choose to pay an allowance in conjunction with chores, the amount of money will need to correlate with the number of chores done.
- How much does your child need? Is it strictly fun money, or will you be requiring your child to spend his or her allowance on items like clothing as well?
The right age to give an allowance
There isn’t a hard and fast rule when it comes to the correct age to start giving an allowance. After the age of three, use your child as a guide: When they seem interested in money it’s probably a good time to start.