Allowances for Children - Learning to Earn

One day, you ask your child to take the trash out. They turn around, look you directly in the eye and say, "Jimmy Lee, the kid next door, told me his parents give him an allowance to take the trash out. Do I get an allowance for taking the trash out?"

This is a situation every parent endures at some time. There is no right and wrong answer to their question and opinions vary about the allowance topics. Take a look anywhere online and you will find numerous articles regarding kids and allowances. This article is not presented to provide any type of opinion about it either. The goal of this article is to help you, as a parent, to decide how to come up with a solution of your own that works for you. Obviously, if you are considering providing an allowance for your child you will need to determine a budget for them. You do not want to give them too much, because you do not want them thinking that money grows on trees. So I am going to provide you with some sound advice in the determination of these allowances.

First, you do not want to provide an allowance for normal household chores that everyone has a hand in. However, if your child does something that is not relegated to the routine chores around the house, that would be a good reward for your child's ambition. For example, providing a generous $5 for washing the car, shovelling the driveway, or walking the dog. This serves two purposes for our children; it provides them with a little fee and it provides them with physical activity, good for the mind and body.

Second, when you are deciding an allowance, make sure your children are present. For example, when you are paying your bills, let them know you are trying to decide how much you can afford to pay them. It is important to emphasize how much you can pay them. Plus, you need to provide them with definitive rules for their allowances, they need to understand you do not get paid for nothing. You will also want to let them know this is the day you will be paying them. It gives you a definite date to pay their allowances and you will not forget to pay it. Plus, your children will learn how to set their money aside from watching how you maintain your funds. This strategy will prevent your children from approaching you when they discover a neighbor is paying their children more. You also want to let them know they get will get a raise every year, since we all know the older we get the more expenses we incur.

Third, you never want to use their allowance as a punishment or reward tool. This leads to problems in the future, especially when they get a job. This could actually lead to problems with their motivation, confidence, and self esteem. You do not want to give them an allowance for their birthday, unless they approach you and can explain why they should receive an allowance for their birthday.

Finally, you have to remember their allowance is theirs. Do not tell them what to do with their money, regarding their purchases. You can insist they keep a record of how much they are spending and what they have spent their allowance on. Another thing you can do is ask them to put their money in a savings account, of course they do not always like this. If they do not like the idea of putting their money in the bank, then offer a matching incentive. If they put $5 in their savings account then you will put another $5 in their account too. This will negate their reluctance. Remember, children are children. The ultimate goal as a parent is to make sure our children are ready for the real world. We do not want our children having delusions about what real life is like. This will provide them with a priceless education and they will only have you to thank in the end.