November 8, 2019 • 4 mins
Good habits can last a lifetime – so start early in teaching your child how to handle money. One avenue of teaching is via allowance, which can provide a sense of independence, encourage saving, and teach children the cost of things.
If you’re going to give an allowance, you must decide the amount. A 2018 survey from allowance tracker RoosterMoney found that the average child aged 4-14 takes home around $8.43 a week – with most getting around $1 for each year and the amount increasing as they got older. For instance, a 6-year-old would get $6, a 7-year-old would get $7 a week and so on.
How much they get should ultimately be based on your values and family budget – as well as what you expect them to buy and your area’s cost of living. Here’s a few approaches that can help you decide.
It’s simple: when your child does chores, they get paid. No chores means no money. This approach has several advantages, including teaching that money requires work. It also helps them make choices and learn consequences. For example, if they choose not to do the dishes, they don’t get the money wanted to buy a new toy. Be aware, though, that this approach can also suggest that they don’t have to do chores — that chores are a choice.
Chore-based allowance can also be seen as a reward for doing things that your kids should do anyway: cleaning up after themselves and helping around the house. One way to deal with this is to decide which chores are tied to allowance and which tasks (such as putting dirty clothes in the hamper) are expectations and not options.
Another approach is to give kids an allowance each week no matter what. Separately, they are expected to do their chores and help around the house because they are part of the family. There is no link to allowance and work. With this approach, your child has money no matter what – so they can gain firsthand experience with real money. You can also reinforce that chores are something they are expected to do because they are part of the family. However, with this approach, some children may take away the idea that money will always be available and handed to them.
There’s also a third option. Give your child a set amount of money each week as allowance, which is not tied to any chore or job. Make it clear that, as part of the family, they are expected to do certain daily chores like clearing up their dishes and cleaning up their toys. Then, if your child wants to earn additional money, they can do other jobs around the house. These should be different from the daily chores they are always expected to do. Some examples would be cleaning windows, raking leaves, giving the dog a bath or raking the leaves.
For younger children, always give them allowance in cash and coins. It’s easier for a child to learn about money if they are working with the tangible kind."
Regardless of how much you decide to give your kids, these allowance practices will be helpful in teaching your child the right behaviors and attitudes.
Source: Broadridge Financial Solutions, accessed October 18, 2019.
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