Beginning an allowance for kids is a fun and educational milestone in their life. It’s a time when they begin to learn money management, spending versus saving, and how to take responsibility in the home. Parents will vary on whether they think allowance is a good idea, or how they manage it.
The following are just a few things you may want to consider if you plan to give your child an allowance.
4 Things to Consider When Deciding on an Allowance for Kids
1. When should I start giving my child an allowance?
There’s no perfect age. If your child is old enough to begin helping around the house, however, it may be a good time to start considering an allowance for kids. With our oldest, we began giving him a $1.00 a week at age 4. That was in exchange for him picking up his toys in the living room, feeding our inside dog, and setting the table for dinner.
2. What dollar amount is a good allowance for kids?
You can look at this question in two ways:
- Start with a base amount ($1.00, for us) and increase as the chores increase.
- Give your kids an allowance that is relative to their age ($0.50 to $1 for each year of age)
We prefer the first idea better, as I feel that it’s easier for us to manage and it shows him that the harder he works, the more he can earn!
3. Should the allowance be tied to chores?
Some parents freely give their children an allowance without it being tied to work. They feel that kids should want to help out our the house and do it without an incentive.
In our house, we do tie the kids’ allowance to the chores they need to do. That way, they learn responsibility — as well as consequences (no allowance for weeks where they don’t help!).
I will note, however, that my 5 year old’s bedroom is not part of his allowance. That is his personal space, and he should keep it clean without receiving money for it.
4. Do I need to control how my kids spend their allowance?
While I am all for letting my son spend his money how he sees fit, I do suggest to him that he save some of it for larger purchases. My husband also model the need to donate to charity by doing so ourselves. As he gets older, we will ask him if he’d like to donate his own money to worthy causes, when he can better understand the need to help others.
Also, a fun game like Dave Ramsey’s Financial Peace Junior may be a great way to teach spending, saving, and donating without being to overbearing!