I’ve been writing a series on teaching kids about money and allowance, Raising your kids to be MONEY SMART and Allowance: 2 Simple Systems you can Implement Today. You can go back and read those, too! 🙂
Today, I will talk about how much money is appropriate to give your kids. There are 3 questions you should ask yourself when setting allowance amounts.
1. How old are they? I don’t think you need a 5 year old getting $10 a week for an allowance. Younger kids are just learning what money is. My daughter is happy going to The Dollar Tree and picking out a $1 toy. She is learning that when her money is gone, it’s gone. She get’s $2 a week. My older son is turning 10 soon. He has more responsibilities and understands what it takes to buy something. We are teaching him about budgeting and saving. He gets $7 a week. My middle son is a spender. If he has any money, he has to spend it. We know this and we give him $4 a week.
2. What are they doing to earn the allowance? My older son mentions often that he’s doing more work, so he should get paid more, which we do. We also give him an opportunity to earn more money by doing extra projects around the house. He likes to save up for bigger purchases. If the kids don’t do the chores we have predetermined and with a good attitude, their allowance is reduced or skipped for the week. What my kids do for chores are listed here and here.
3. What are you expecting them to purchase with the allowance? What are your children buying? Are you expecting your kids to buy their own lunch at school? Do you expect them to buy souvenirs while on vacation? Depending on their age, each parent will have different answers. The older they get, the kids should get more to help them learn to budget and learn want is a “need” and what is a “want”.
Check back in 2 days to read the last post in this series. (I’m taking the 4th of July off) 😉 I’ll talk about now that the have an allowance, what are you doing to teach them about money. You’ll need to guide them in a way where they learn proper spending habits. I’ll tell you what system we use.
You may also like these posts.