Should My Kids Have an Allowance?
If you have kids, the idea of an allowance has probably been brought up around the dinner table – whether by you or them! Maybe you’ve even started the process of introducing an allowance, but you’re wondering if you’re making the most of this learning experience for your kids.
If you had (or didn’t have) an allowance as a kid, your idea of what it “should” look like is impacted by your own experiences. And of course, everyone has an opinion about allowances! Some people will swear that you shouldn’t give one, while others are staunch advocates of them.
We have posed a few questions below that might help you come to a conclusion about how to provide an allowance. There is no right or wrong way to do it. Each child and each family is different!
What should I “pay” for?
Should you simply give your kids an allowance? Should you tie the allowance to meeting specific requirements or expectations? That’s up to you! We do think that tying an allowance to chores or other commitments helps to keep your kids accountable and lay the foundation for future success. Financial guru Dave Ramsey goes into detail on this topic here.
You may agree on dollar amounts for each chore that is completed weekly – taking out the trash, making the bed, feeding the pets, or doing their own laundry. The chores may change based on your child’s age and ability. Think outside the box and incentivize behaviors that you want to see your child exhibit. For example, offer a “bonus” for reading books, making good grades, and meeting expectations at school.
How much should I give?
There is no right answer here. Consider your budget first and foremost. Then consider your child’s age. A four-year-old may be more excited about earning quarters than dollars, while a savvy teen may have higher expectations.
It’s important to set the expectations upfront for how much they can earn and what stipulations may apply. For example, if your child is expected to complete five chores each week for a $5 allowance but only finishes three chores, they will only get $3.
You should also establish consistency for when your child's commitments need to be met and when you will pay them. Whether it’s every Saturday to wrap up the week, or every other Friday when you get paid, be consistent. By holding yourself accountable, you set your kids up for success, too.
How can I help my kids manage their money?
An allowance isn’t as simple as handing your kids cash and calling it a done deal. You still have the responsibility of teaching them proper money management. Help them determine where they will keep their allowance, and how they will track their earning and spending. You can do this in a notebook or use one of many apps like these.
You may consider opening a saving’s account for your kids and encouraging them to deposit a certain percentage of their earnings into it at the end of each month. Maybe you even offer a “bonus” for them reaching a certain savings goal and maintaining it.
No matter what path you take as you make a decision about allowance, take it as a learning experience for your whole family. Remember, even if you don’t feel like a financial genius, you can still help your kids learn how to manage money. The values you instill at a young age will follow them through life!