Question: What is a reasonable weekly allowance amount? I want to teach my children the value of money.
Answer: An allowance is a great way to begin teaching your children about the value of money, as long as you make sure to take an active role in explaining the many benefits and potential pitfalls of personal finance.
It is important for children to understand the true value of money and a lot of parents tend to overlook this issue.
"He that is of the opinion money will do everything
may well be suspected of doing everything for money.”
- Benjamin Franklin |
Too often, children grow up without the basic knowledge of a checking account (or any account for that matter), which can lead to uncertainty and mishandling of money far into the future.
For now, start with a weekly allowance that is within your budget. Depending on the age of your child, this may mean fifty cents or five dollars. For older children it may mean more.
Do only what you feel you can financially and what you feel is reasonable for the “work” and “effort” they contribute to the household.
Yes. Your children should have some sort of chores, or tasks, to perform in order to earn this money. If you merely give you child everything they ask for without putting any effort into the process, they will become spoiled and will not fully understand what it takes in order to earn a dollar.
Some parents make this mistake because they think they need to be their child’s best friend. However, your child does not need you to be his or her best friend. They need a role model to teach them and guide them on the path of life.
Decide on what chores you think they should focus on and discuss the matter with your child. Let them know that in performing these tasks each week they will be rewarded for their efforts.
Many kids get excited to learn they can earn a weekly allowance because while they do not yet grasp the whole picture concerning finances, they do understand that money can buy things they desire. A few dollars to a child can seem like quite a sum, so don’t go overboard in paying them large amounts – this will only diminish the lessons of working hard for a dollar.
Keep the amount reasonable. Giving your child too much money for small tasks will send the wrong message.
Pay attention to the effort your child puts into his or her work in order to make sure they stay on task and are not just half-heartedly doing the work. It is important children understand that the work they do represents their name, their reputation and that of the family.
Every deed done only half way should not earn your child anything. Make them stamp their name on it, figuratively, by completely each job to a finish. Children should not find earning their money “too easy;” half-washed dishes are not the same as totally clean dishes.
A weekly allowance should be paid out on time provided the chores on done completely. When you pay your child, take the time to let them know what you thought they did well and what they can improve on next time.
Remember also that there are some chores that should not be paid for doing. Some tasks need to be done simply because the child is a participating member of the family.
"Without frugality none can be rich,
and with it very few would be poor.”
- Samuel Johnson |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
