Monday

Allowances

At what age do you start allowances? Should allowances be tied to chores? How much allowance should you provide? How do we tie allowances to a lesson in budgeting and saving?

posted by Unknown at 6:27 PM

2 Comments:

Anonymous Anonymous said...

I've had many discussions with parents on allowances. Should children have their own money? Are they old enough to safeguard cash? Should we encourage them to spend? Do we want children to obsess over money?

Recently, I opened bank accounts for the older children. The bank cooperated by creating joint, linked accounts that don't require minimum balances. Of course, the account was set up wrong, but the bank quickly corrected the problem.

Cooperating with three families, we decided to provide these elementary kids with $10 per month. By cooperating on the amount, hopefully the kids won't complain when they learn that other kids get more.

We did decide to tie the allowance to some minimal daily chores. This part is working great since the kids do these chores without reminder. I did post a weekly calendar of chores on the refrigerator.

The most important part is that the children agreed to save half of the allowance, any cash gifts, and other income into the bank account. The other half is available for daily use. So far, this is working OK. When shopping together, the request for frivolous items have been reduced. They are busy computing if they have the money to buy those items.

Of course, my son is now focused on receiving more money. He has asked about allowance increases, gifts in cash, returning gifts for cash, etc. This obsession with money can become a problem.

Learning is a non-stop process.

12:19 PM  
Anonymous Anonymous said...

Great idea. I would suggest making the trip to the bank a regular activity. This way kids learn the satisfaction of taking the money from their wallet and depositing into their account. Money is not just to be spent immediately.

-Dad of 2 minors.

11:18 AM  

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