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The Smart Way To Give Your Child An Allowance

The Smart Way To Give Your Child An Allowance
November 05
17:11 2014

As we grew up most of us earned an allowance every week. Of course we had to do something to earn the allowance and if we messed up our parents did not give us the allowance. This is supposed to teach us how to manage our money in the future and show us that you have to earn money that it is just not given to us. So these days the rules seem to have changed a little when it comes to an allowance and many of us are confused about giving an allowance to our children. Hopefully this information will help to clear things up for you.

Age

It is best to start giving your child an allowance when he or she starts to have an understanding of money. This age can be anywhere from three or fours years old on up. This will help your child to learn the basics of how to count money by using dollars or even coins. Often times children have a tough understanding of this simply because as parents we are often using credit cards and debit cards to pay for most of our purchases.

The Amount Of The Allowance

If you are looking to set the amount of the allowance for your child you might be very confused as to how much to actually pat him or her. There is a guideline that some believe in that says the correct amount to pay is one dollar per week for the age of your child. Therefore if your child is seven years old then you should give them an allowance of seven dollars per week. Of course you have to give the amount that best suits your budget as well.

Chores/Work

Many parents will decide on whether or not the child will need to work or do chores to earn the allowance. Most will decide that there should be certain things that the child will need to do before getting paid. We have all learned that the money does not just fall into our laps. This can be anything from cleaning the dinner table to taking out the dog or the garbage. Often times a chore chart can help keep track of the chores that your child is doing to earn the allowance on a weekly basis.

Saving Money

When you give your child his or her allowance you should encourage the child to save the money. This does not mean that you need to run to the bank and open a savings account right away but what you can do instead is have a jar or a box where the money can be stored. A clear box or jar can help because it will allow for the children to watch the amount of money grow over time.

Rewards

When your child decides that it is time to spend their money you should leave the decision of what to spend it on completely up to them. This is where the children will learn about what a smart buy is and what is not. If your child decides that he or she wants to spend all of their money on something the first day but later on in the week sees something else they want to purchase then they will learn the lesson the hard way of saving the money and learning from their own mistakes.

Learning how to budget money and save money is something that a child will learn from the parent. A parent can help to guide them through the process by giving an allowance. It is a way that they can make mistakes and learn from those mistakes. The one thing that a parent should remember is that when the money is given to the child it is theirs to do with what ever they want and only a little guidance should be given.

Image credits to : Matthew Coughlin

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