How to Set an Allowance for Children

Most children older than five receive an allowance each week from their parents. Giving your child an allowance will enable her to learn how to spend money, save for a large purchase, or donate to a worthwhile cause to help others. A child under five doesn’t have an understanding of money, so there is little point in giving her a regular amount. Having an allowance gives your child some responsibility for minor purchases, a sense of independence, and an idea of the value of money.

There is no fixed amount that your child should receive at any specific age, although some parents find that a dollar a week for every grade of school will work for a while. (Kinder­garten is worth fifty cents a week.) You will soon learn a uni­versal law regarding an allowance—no matter how much you give your child, her friend always gets more! Conduct a brief survey of other parents to determine the average amount for someone of your child’s age, but expect to find a broad range. Some parents give a larger amount and expect their child to buy candy, comics, and their entertainment with it, while others give a smaller amount but give the child extra money for these treats. It doesn’t matter which system you use, as long as you make the rules clear to your child. Tell her what things you expect her allowance to cover.

Parents often use an allowance to introduce their child to the concept of saving. Ensure that the saving element doesn’t eliminate the child’s spending money! Probably the best strate­gy is to encourage your child to save a portion of her pocket money each week (for example, a third) and to spend the rest in a planned way. A child aged five or six needs her parents’ help to budget money, because her natural inclination will probably be to spend it all as soon as she gets it. Explain to your child why she should save (for example, so she can buy a bigger toy, later) and discuss with her how and when the remaining sum might be spent. You can offer to “match” whatever she deposits in her savings account as an additional incentive to save for the two-wheeler she desires.

Never threaten to withdraw your child’s allowance as a method of discipline.

Filed Under: Lifestyle & Personality


About the Author: Alan Kennon lives a very happy life with two kids and a lovely wife. He likes to share his life time experiences with others about how they can improve their lifestyle and personality.

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