An allowance is a classic method for teaching kids about money. Parents have different ways of implementing them, including the amount they decide to “pay”. Consider these factors when setting an allowance for your child.
Coins picture from Shutterstock
Cheapism runs down a useful list of things to consider when deciding on an appropriate amount. Age, for example:
In a poll conducted by BabyCenter, the most common age for starting an allowance was 4 years old. Some children that young may show an interest in putting money in a piggy bank and counting it up until there’s enough to buy what they want. But if they don’t understand the concept of saving their own money to buy something in particular, they may not be ready. With some kids, 9 or 10 may be the appropriate age.
As your child learns more about the value of money, you might consider increasing their allowance. Cheapism recommends upping the amount by fifty cents a year.
Another factor? How your child will use the allowance:
If it is intended to be spent on “extras”, such as toys or video games, then a lesser amount is certainly acceptable. If, as they get older, you want them to use their allowance for necessities such as new school clothes or supplies, a greater amount would be more appropriate. Consider what you will chip in and adjust the allowance accordingly.
Of course, you should also consider your own income when coming up with an amount. Make sure you budget for the allowance appropriately. For a few more tips, check out their full post.
How Much Allowance Is Right for Your Child? [Cheapism]
Comments
2 responses to “The Factors To Consider When Setting An Allowance For Your Child ”
Following a precedent my in-laws set with my wife when she was a child, our kids get a fixed amount for every year old they are. It was 10 cents a year back in the 70’s; due to inflation we pay 50 cents per year.
To ensure it all balances out we have a sheet stuck to the filing cabinet with the weekly amount and tick it off when paid. Sometimes I don’t have cash so I get behind; other times we give them an advance so we mark this off too. That way the kids know when pocket money will resume.
Our 2 year old loves putting money in his piggy bank. Then tipping it out and putting in again. He has no idea what it is.