Should Your Child Have an Allowance?

Growing up in the 80s, my brother and I received about 5 dollars a week for doing our chores. Our chores? Cleaning our rooms. Taking out the trash. Simple things that gave us an incentive to help out around the house.

Allowances teach children the value of money. Allowances teach responsibility, but what should kids do for an allowance, and how much should they get?

Start early

The best time to start giving children an allowance is when they can understand basic money principles- usually around 6 years old, or first grade. By then they know the value of a dollar.

Decide how much

Obviously, your first-grader is going to spend less on things than your fifth-grader because the things a first grader would want are very different. It’s reasonable to give your first-grader a dollar or two each week. As they get older, and you begin to expect they will pay for things they want like clothing and cellphones, it’s reasonable to give them a bit more.

What will they get an allowance for?

Experts don’t always agree on this one. Some say giving your child money in return for doing chores undermines the value of doing chores for the greater good of the family- not just for money. Whatever reason you decide to give your money, keep it consistent. Decide when you will give your child money, and how much they will get each time.

To save or not to save

The child’s allowance may be his own, but now is a good time to teach him about saving, and the importance of saving his money. Encourage them to save beginning with something small. Make the goal concrete, and encourage them along the way.

Giving your child allowance is another step in helping them find their independence. Teaching them to be responsible with their money now can set the foundation for good spending habits in the years to come.