Anton Simunovic, a father of six who runs kid budgeting site ThreeJars.com, says that at that age, children start understanding ownership … and you don’t want them to learn negative spending habits. For example, Simunovic points out, if your child is grabbing items off of the shelves in department stores while demanding that you buy them it’s probably time for them to equate getting things with earning money.
However, if you’re worried about writing your kindergartner a blank check, MainStreet offers these suggestions for instituting an allowance policy that works for both you and your kids.
1.Set a small amount.
An allowance is intended to teach your child about money management, not as a means to minimize their nagging (though, when administered properly, the funds can do that, too.) As such, there’s no reason to supply your child with an exorbitant amount of money. Van Petten explains that you can test the waters with your child by offering something as small as a quarter that your little one can use to purchase a gumball from a vending machine.
Simunovic suggests a good rule of thumb when it comes to determining their allowance amount is to give your child half of their age in dollars per week. Teenagers can be a little bit tricky. You’ll want to assess first, what you can afford, and, secondly, what you are expecting them to buy for themselves. American Express did find that, on average, parents gave their teens $66 a month in regular allowance.
2.Make them earn it.
An allowance is more effective when tied to behavior, so don’t just hand your child a $5 bill every Sunday. Instead, have them earn the funds by doing small chores, such as taking out the garbage or vacuuming the living room. If your child seems particularly unmotivated, Van Petten suggests offering a small base amount that is adjusted for both good and bad behavior. Certain tasks that are expected of your child, such as making their bed or hanging up their clothing, can earn them this minimum. Should they fail to do these things, however, you shouldn’t hesitate to deduct from the base amount.