Guidelines for Setting Allowances
Parenting expert Stacy Debroff on teaching your child the value of money
Childhood allowances are not merely perks. They provide a valuable tool for showing your child how to save and manage money, develop responsibility and set goals — all of which are lessons that will help him prepare for the future.
When starting out, give your child enough money so he is faced with the choice to either spend some right away or save for future purchases. The amount should reflect your child’s stage in life and take into account the types of things you expect him to pay for on his own — candy, a trip to the movies or new clothes. Generally, one dollar for every year of a child’s age is a sufficient amount, though you can also set a base price and increase it by one dollar every year.
Be clear about what you expect your child to do to earn his allowance. Although some families prefer to give an allowance in return for chores, a child who connects routine tasks with money might be less likely to complete his household duties if he doesn’t need the money at that time. Instead, give your child a chance to earn money by taking on extra jobs around the house or yard. As incentive, you can keep a list of each job and its monetary value on the fridge.
Once you have a system in place, discuss the best ways to allocate his money. For instance, if he wants to buy something you don’t think he needs — such as a new toy car when he already has several he doesn’t use — let him understand the consequences of his purchase, but don’t forbid it. Also, provide restrictions for treats or toys that are not permitted.
Other fun money-saving activities include paying him half the money you save with coupons he clips for groceries, offering to pay interest on the money he saves during the course of a year and opening a savings account for him.
About the author: Stacy DeBroff is president and founder of Mom Central, a company devoted to providing pragmatic tips and savvy advice to strengthen busy families and enhance the home environment.
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