Money
Question: How much money should our 8-year-old son get as allowance? Should we tie allowance to chores?
Answer: Allowance is the most important tool parents have for teaching their kids about money management, yet, only 60% of all parents give their kids a regular allowance. Parent’s reluctance to dole out the weekly dough might be one for any of the following reason:
• They’re uncertain how much money to give.
• They don’t know whether to tie the money to household chores.
• They don’t know much about money management themselves.
Fortunately, there are some generally accepted guidelines and suggestions to help answer these money questions.
Most advisers fall into one of two camps on the amount of money is appropriate for kids. Some believe the best solution is to give a child one dollar for each year of age. Every three or four year old kid who ever sat in a shopping cart or in front of a television is ready to learn elementary lessons about money, but $3 or $4 a week is enough to teach them at first.
By the time children are in elementary school, there needs to be a mutually understood agreement about how that money will be spent, with a parental insistence that a specified percentage of the money goes to spending, savings and sharing. Kids also need to know what expenses they’ll be responsible for. Will they pay for school lunches, or will their spending money be for only discretionary purchases?
By the time the kids are tweens, the savings portion should be further divided into short-term and long-term savings. Some parents agree to match their kids’ long-term savings dollar for dollar.
Parents who try linking money to household chores, though, learn pretty quickly that the system doesn’t work. First of all, once kids have enough money for the things they want, they no longer have an incentive to do chores. Secondly, children should be taught they have basic responsibilities to care for their own belongings and contribute to a smoothly running household. If that lesson is tied to financial remuneration, it’s seen as a reward and something they can decide whether or not to do.
That doesn’t mean, however, kids should never be paid for working around the house. For instance, when children want or need extra money to buy Christmas gifts or attend a special event, it’s not unreasonable to demand they do extra chores to earn the money by babysitting, doing additional lawn work, preparing meals or helping with errands. Younger children who want the latest and greatest electronic games can be required to wash the dog or car, or sort through the games they already have and trade them in at a used game store. By doing so they learn the value of thrift and simpler living.
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