How much should I give my child for an allowance?
Whether or not to give your child an allowance and how much to give is a great question! As is the case with so many parenting issues, there is no right or wrong answer as to whether or not to give your child an allowance. There are, however, some great guidelines put together by Dr. Karen Rancourt to help parents help their children establish a positive relationship with money if parents do decide to give an allowance.
1. Should Allowances be tied to chores (44% of parents give allowances)?
- There is controversy about this, but I suggest not linking chores. Rather, teach in parallel what it means to be a member of your family and your expectations around responsibilities and contributing to the family.
- Use allowances as a teaching tool, not as a reward or punishment thing. When older kids feel manipulated, they may eventually tell you “to keep your stupid money” – especially when they can earn their own money!
- Teach the ESSS Money Management Model: Earning, Spending, Saving, Sharing (and for some kids, Investing).
2. How much should I give as an allowance?
- Some give $1 for each year of a child’s age.
- For older kids some compute a child’s weekly expenses (subway money, snacks, and entertainment).
- As children get older, you may need to increase allowance amounts.
3. Should I put any conditions on allowances and other monies my child gets?
- Parents may want to let weekly allowance go strictly for spending.
- Require a visible way for money to be categorized (Save, Spend, Share): transparent plastic containers or Savvy Pig saving piggy bank.
- Use visuals whenever possible, especially with younger children (e.g., a picture of the item for which your child is saving; a bar graph showing progress toward hitting goal to purchase item; if a check was received for a gift, let your child see the amount in real money).
- Parents may want to require divvying up money gifts according to Save, Spend, Share.
- Require a written record of all monies In and Out.
- Let it be known to regular gift givers that your child is saving up for something special and that donations toward that something would be a greatly appreciated gift.
- Parents may want to do some matching of funds when your child earns some money, especially if child is saving toward something expensive (e.g., school field trip, special clothes, sports equipment, some technology).
To read more about children and money management please visit the original Mommybites video by Dr. Karen Rancourt.
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