Children’s Allowances—Why? When? How? And How Much
By Suzanne M. Anderson, RSW
Why? The main goal of parenting is to teach our children to be independent, responsible adults. An important feature of that is handling money. Receiving an allowance provides an opportunity to learn about money management, decision-making, saving, charitable giving and delayed gratification.
When? Depends on the child’s age, their ability to handle or understand money. Some parents give a money test. Questions can include: If you have $10 and a game costs $2.50 how much will you get back? or, How many 10-cent coins are in $1.00?
How does it all work? One of the questions that brings up the greatest variance of opinion is should the allowance be something they receive as a member of the family or as compensation for fulfilling responsibilities, such as chores. Those who advocate an allowance not being tied to chores don’t want children to grow up believing they should be paid for everything they do. Somethings just have to be done because a child is a part of a family. Those who advocate an allowance being tied to chores believe it is good preparation for the working world. Many people choose a blend where a base amount is given and additional amounts can be earned through extra chores. A parent list of chores can left on the refrigerator for bonus allowance earning.
Experts recommend that money be used only to teach money management and not as a method of control through reward and punishment.
You may want to consider teaching your children to divide their allowance for spending—which the child totally controls, sharing—which parents can guide, and saving—over which parents have veto.
Generally, allowances are provided weekly to help the child to manage and pace their spending. If they fail and spend it too quickly they will not have to wait long before they get their next instalment. Be sure to pay it reliably on the same day every week.
Be clear what it covers. For younger kids it may cover candy and games. For tweens it may include things such as movies or entertainment entrance fees and for teens may include a clothing budget.
And if they run out, it’s gone until the next week. No borrowing in advance. Learning delayed gratification is an incredibly important characteristic.
How Much? Proposed amounts vary from $.50USD to $1.00USD for each year of age, depending on the parents’ financial situation and the social context in which the family is living.
In deciding how much, consider the money spent each week responding to your child’s special requests for snacks or other items. You want to be sure that it is not so much that they can buy everything they want. And in considering this with older teens in Singapore, one mother has suggested that allowances that are too big may support our kids’ engagement in drugs and alcohol which are not inexpensive past-times. Interesting food for thought!