Q: When do you start
giving your kids an allowance?
A: There’s no magic age.
Start an allowance when your child becomes interested in money and
using it to buy things. This is usually about age six. But if there
are older children in the house already getting an allowance, don’t
be surprised if your five year old asks for an allowance. For your
child’s first allowance, look at the piggy bank recognized as a
Parent’s Choice Award Winner that has four transparent chambers and
four slots, labeled Save, Spend, Invest and
Donate.
Q: How much should the
allowance be?
A: While there is no magic age, there is
a magic amount! The allowance should be enough to shift to your
child the ability – and the responsibility -- to pay for some of the
things you’ve been buying in the past. Keep track of what you’re
spending on your child. Then figure out which items you will
continue to be responsible for and which expenses you want the
allowance to cover. Here’s a simple example. Your six year old is
really into Yu-Gi-Oh and the allowance tracker shows that you’re
laying out $4 a week on average for Dark Beginning Super Cards. We
suggest you start him off with a $5 a week allowance. Fifty cents is
for saving and another fifty cents is for charity. The remaining $4
can be spent any way he wants during the week but explain that you
won’t be buying him Yu-Gi-Oh cards anymore. You’ve created a
situation in which he is learning to think reflectively: “Should I
spend the $4 on a toy at the drug store or on a Yu-Gi-Oh card or
should I save for a few weeks so I can buy a more powerful Yu-Gi-Oh
card?”
Q: How long a time period
should the allowance cover?
A: When you first start,
give the allowance weekly. As your child gets older, increase both
the amount of the allowance so that it shifts more responsibility to
your child, and the time period that the allowance covers. If your
child is handling a weekly allowance responsibly, try extending it
to two weeks, and then to a month at a time when your child is in
his or her mid teens. And be consistent. A recent survey of school
children in Chicago found that their biggest complaint about
allowances wasn’t the amount or the frequency; it was their parents’
failure to provide the allowance consistently.
Q: Any special
suggestions for teenagers?
A: Sure. As your kids get
older, try a clothing allowance. At the start of each semester, work
out a reasonable clothing budget and allow your child to select his
or her own clothes. Clothes have tremendous symbolic importance for
teenagers, and while they may be fiscally responsible in other areas
of their lives, they can easily blow their entire month’s allowance
on clothing. A separate clothing allowance prevents this from
happening, and it also gives them control of something that has
great meaning in their lives. Provide your kids with a clothing
allowance that covers the clothes they need for one semester at
school. Specify which types of clothing are covered by the
allowance: school clothes, after school clothes, party clothes, etc.
Try to let your child have as much autonomy in buying clothes as
possible. If her school requires uniforms, we suggest that you buy
school clothes for her and provide a clothing allowance for
after-school clothes. Boys in particular usually aren’t interested
in formal clothes. If you want your fourteen-year-old son to have a
nice suit to wear on formal family occasions, pay for it yourself
and let him use the clothing allowance to buy what he is interested
in wearing.
Using an allowance to help your kids
learn to think reflectively can be a constructive new idea for your
family.
At Financially Intelligent Parent www.FIParent.com, you can download the
FIP Allowance Tracker that allows you to chart what you are spending
on your child for two weeks. As an on-line member, you’ll have
access to an interactive FIP Allowance Advisor to help you figure
out which items you want your child to be responsible for.
Eileen Gallo, Ph.D., and Jon Gallo, J.D., Authors of “The
Financially Intelligent Parent” Creating positive money and life
values for your childrenwww.FIParent.com
