How Much Allowance Should I Give My Child?
It's the age old question "How much allowance should I give my child
?"I probably should not tell you this now, but I do not have an answer for you. But, before you give up on me, I have a couple different options for you as well as some sage advice on what most experts do agree on.
First things first, I am pretty sure almost every expert agrees that all children should be given an allowance. If you saw my clip on Good Day Sacramento on May 21st, you know that I am one of them. An allowance teaches children several things, including, how to budget, how to make financial decisions and much more. So, if you are debating whether or not you should give your child an allowance, the answer is a resoundingYES!
What age should I start?
Well then, when do you start? The experts agree that earlier is better. You do not want to wait until your child is a pre-teen or teenager before you start. As young as 3 or 4 years old, they start to understand the concept of money. Now, you do have to remember, children tend to lose things at this early age, but it does not hurt to start teaching them good habits about keeping money in a safe place.
To tie to chores or not to tie to choresthat is the question.
Again, many experts agree that an allowance should not be tied to chores. Your children should do chores because they are part of the family. My allowance was tied directly to chores when I was growing up. And, until I started doing research for this article, I still felt that way. However, I can definitely see their point. This may take a shift in thinking, but it does make sense. When children get older and have their own part-time job, there really is no incentive to do chores for their allowance any more. Rather than trying to shift their thinking then, make the shift now.
Never withhold for punishment
Most experts also agree that you should not withhold your child's allowance for punishment. You are giving them their allowance to teach them how to handle money at a young age. It is not a tool to use while disciplining your child. Also, try to be consistent. I understand how busy life can get and you might forget to give your child their allowance. Try putting a "pay day" reminder in your calendar to assure yourself you will not forget to give them their allowance each week.
How much?
How much is not something I can really give you an answer to, but I can give you some different ideas.
$1 per year of age each week
$0.50 per year of age each week
Paying your children based on minimum wage and the time it takes them to do chores (although the experts do not recommend that, just thought I would throw it out there for you)
Factor what they will need to buy what you will no longer be paying for (i.e. toys, lunch, snacks, outings with friends, etc.) and give them enough to take care of it themselves
The fact of the matter is that each family is going to have to make this decision based on their core values, family budget and number of children in the family. This is a very personal decision.
The most important thing is that your children are able to learn how to budget with the money they have. It's okay to let them make poor buying decisions. Make sure you keep an open dialogue with them about why they made the choice and how they can make a better one next time. Wouldn't you rather they learn this at 7 years of age rather than 17 or 27 years of age?
Make sure you do not get in the habit of buying them things at the store if they have forgotten their money, then hoping they will pay you back later. This starts a very bad habit. Have a discussion with them about only buying items they have the money for.
Remember the fundamentals and you cannot go wrong!
How Much Allowance Should I Give My Child?
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