Something that parents might have the most difficulty deciding upon is how much money, if any, they should give their children on a weekly basis. There are many benefits to giving your child an allowance – in that it teaches them how to manage money at an early age and encourages good work ethic that will help them develop skills for later in life – but unless the amount of money given is the right amount, it can be a useless tool and even disadvantageous to the child.
So if you’ve been mulling over how much you think your child’s work around the house is worth, here are some tips to consider! Allowances are one of those concepts that’s discussed generally and in the abstract, but you need hard numbers to work with; additionally, there might be some surprising counter-intuitive advice you’ll discover in this article.
The goal of giving your child an allowance is not so they can afford that fancy cell phone at the age of ten-years-old. The goal is to teach them money managing skills and discipline in spending their money. But how can you give your child hard cash, without enabling them to carelessly spend it? The truth is that if you don’t give your kids an allowance until they’re a young adult, they won’t be prepared to deal with it. It’s much better to introduce them to money at a young age – just as you’d want to introduce them to a second language. After all, isn’t money a language in a sense? So here’s how to encourage your child to develop healthy, money-saving habits.
Well, let’s review some of the benefits to an allowance first, so you can be sure you’re not spoiling your children by giving them their own income.
If children are introduced to how much items they want, cost, then they will have an idea of cost and reward that they can continue to discover and learn this concept as they get older. This is an invaluable understanding and actually prevents waste later, rather than promote it. As well, money is a tricky animal, even for us adults. So why not give them at least a small income that they can try to manage at an early age? It most certainly will be an important learning experience that they can apply to their lives more and more with every passing year and every new dollar they earn.
Surprisingly, even a three-year-old toddler can appreciate money. And that’s why you can begin giving an allowance to your child at a remarkably early stage of development – it doesn’t have to be a lot, but even a dollar or two is better than nothing.
Now the big question – how much money should you give your child? There’s no single answer to that. But there is a method you can use to calculate how much the allowance should be. Think about how much you, as a parent, spend on your child on a weekly basis – for toys and perhaps lunch (if your child is in middle or high school), etc. And then give them that amount of money! Now, your child gets to decide how to spend it. Discuss with your child or adolescent what they are responsible for buying themselves. Not only have you now given them the opportunity to manage their money and save it themselves, but you’ve alleviated a lot of your own burden too.
Too often, allowance is associated with household chores. But it shouldn’t be. Your son or daughter should feel obligated to help around the house, despite whatever gifts or money you give them. Their allowance should be a completely separate ordeal. You can encourage them to get a job or do extra chores around the house if they demand more money or belongings; but still, allowance and household chores should not be linked together.
You should continue to adjust the allowance amount with every passing year. And you should also find that your child gradually improves their money managing skills and will ultimately appreciate the value of material items and start saving up all on their own! By the time that they fly the nest, they will be more than prepared to handle the bigger incomes that await them.