Allowances can be a great way to introduce children to money in a small way to see how they’re behaving. Kids love getting them, and it helps them to set goals for themselves and begin forming those all important financial habits.
There are a lot of questions around allowances, how much should the child get, when should they get it, and so on. This article is going to overview everything you ever wanted to know about beginning an allowance.
Why should I give my kid an allowance?
Some parents question the value of an allowance at all, reasoning they still end up paying for a lot (which is true) and it’s such a small amount. The truth is it’s important to give kids allowances, to get them started on a good financial foot. You don’t want their first pay cheque to be the first money they ever manage. If they make mistakes with an allowance, it’s easy to recover, rather than later down the line if they make a mistake with credit cards.
What’s more, children really love allowances because it gives them the chance to buy things for themselves. You’d be surprised to see how much your kid will enjoy saving up with just a few helpful nudges.
This depends entirely on you and your partner. Most kids start getting an allowance between 6-8, but some start even earlier than that (and some later). It all depends on when you’ve decided they might be ready to start the learning path an allowance is going to put them on.
How much money does a kid get for allowance?
Again, this is somewhat dependent on you and your partner. There are a few things to help you make this decision: how old are they? Are they contributing to the house yet? What types of personal expenses do they have? These questions will give you an idea of how much you want to give them, depending on what’s reasonable for you.
Why do they get allowance/what can they do to earn it?
This is dependent on the age of the child, but by the time your child is old enough to earn an allowance he/she should be old enough to contribute some chores around the house. It is important to note that while allowance may be connected to chores in saying that they don’t get it if they aren’t done, it shouldn’t be thought of as payment for chores necessarily. You don’t want to have to pay your child every time you need them to clear the dinner table, you want to teach them responsibility, both household and financial. So be careful about tying allowances concretely to chores, as it may start to be viewed as a payment system.
When do they get allowance?
While we typically think of allowances as coming in once a week, this too can be flexible if the parent prefers to do it on their pay day. It’s up to you and what you think works best. The weekly schedule keeps it smaller and gives kids more chances to save or spend, so I tend to go once a week.