Allowances For Kids Allowances for Kids 1) What are the benefits of giving kids an allowance? a) Allowances teach children about managing money and how to be smart consumers. i) First hand experience with money is vital. ii) The only way they can learn about money management is with successes and failures. b) It allows for the value of saving and charitable giving. c) It can cut down on the number of times your children come begging for something in the store or asking for money from your pockets for extra expenses.
d) It helps them distinguish between needs and wants. 2) How old should my child be when I begin giving an allowance? a) When children start to know what money is and start asking for things in the store, approximately age 3. (1) They realize they need it to get what they want. (2) They don’t, however, realize the value it has. b) Many parents feel that by kindergarten or the first grade is the most age.
3) Should an allowance by tied to chores? a) Many parents believe that it should be. i) It is an incentive. ii) Parents don’t want kids to view it as an entitlement. b) There are many reasons against this idea. i) Grown-ups don’t get paid for doing household chores, why should the kids? ii) A share of the family income is an entitlement just like food, clothing, and shelter are to any family member. iii) If a child doesn’t feel they need the money, they won’t do the chores.
c) Rather than paying someone else for raking leaves or mowing lawn, pay your child for doing the job instead. 4) How much is appropriate to give? a) Things to consider: i) The age of your child is an important factor when deciding how much is an appropriate allowance for them. ii) How much are their friends getting? iii) The cost of living for the area you live in is also important. iv) Things you want them to be responsible for needs to be considered as well. b) Averages from survey: (kidsmoney.org) i) Young children usually receive about $5 per week. ii) Preteens get between $7 and $10 per week.
iii) Teens get between $10 and $30 per week. 5) What should they be responsible to pay for with their allowance? a) They should be responsible for spending i) One area of spending should cover their wants. ii) The other area of spending should cover some of their needs. b) They should also be responsible for sharing some of their allowance or giving some away. i) This could include charitable donations ii) Gifts for family or friends are another outlet of giving.
c) Another area that a child’s allowance should be put toward is savings. i) 10-20% is an average percent of allowances that is put into some type of savings. ii) They should save for something they want that costs more than weekly allowance. iii) Some parents have them put some aside for their own college fund. 6) Should they be able to borrow money if their allowance runs out? i) It invites attitude “Buy now, pay later” and runs counter to the idea of planning. ii) Life is unpredictable and you can’t plan or save for everything and sometimes people need an advance.
(1) Set up a pay back schedule they must stick with. (2) Subtract it from next allowance payment. (3) Never let them get more than one allowance payment in the hole. 7) What are some additional tips for me? a) Don’t miss a payday. i) It needs to be as dependable as you expect your own paycheck to be.
ii) Never delay or miss a payment. b) Don’t use allowances to correct behavior. i) Never dock or withhold an allowance for a punishment. (1) It confuses discipline. (2) It confuses money handling.
ii) Don’t link it to homework completion or good behavior because neither should require payment. c) Time passes more slowly when you are young. i) Don’t stretch repayment time past 2 or 3 weeks. ii) The younger the child, the shorter time there should be between starting to save and actually making the purchase (1) Preschoolers: a few days (2) Pre-teen: a few weeks (3) Teens: a few months d) Develop accountability. i) It can prepare them for larger sums of money.
ii) It can prepare them for managing a checkbook. Speech and Communcations.