I have a few questions: In Teenproofing there is talk about allowance not connected to chores. I love the idea of teaching the kids about money responsibility, budgeting, etc., as discussed. Our kids are 12 and 8. We have not given them any allowance to date. They have regular chores and do not get paid for them. It is suggested that kids get $100.00 a month, and this never increases, which seems like a lot for our 8-year-old and even a bit much for the 12-year-old unless they are buying all their own clothes. We are thinking $20.00 a month to start with the idea they buy treats and toys they want between birthdays and Xmas. They both also get money from grandparents, etc., at Xmas, birthday, school completion and have a fair bit saved. Our 12-year-old has had a paper route for over a year now and saved about $700.00 in his bank account. Do we start small and increase? Start later than 8? Suggestions appreciated.
Hello and thank you for your question. When it comes to allowances the amount of money you choose to give is not nearly as important as clearly defining to your children the purpose of giving them an allowance. It sounds like you are already off to a great start with defining that the purpose of the allowance is for them to learn fiscal responsibility and not to pay them for chores they are already doing. Great job having them do chores, by the way! In the beginning it can be helpful to make a list of things that you expect them to begin to pay for with their allowance just so everyone is on the same page. Dr. Rosemond’s suggestion of $100/month was based off what he estimated they were already spending on incidental expenses for each of his kids. You may arrive at a completely different number when analyzing your family budget.
When we found ourselves getting “nickel and dimed” every time we departed the house, we decided to start giving our kids an allowance and I believe they were 5 and 7 years old at the time. Giving them an allowance actually saved us money because we stopped paying for treats in the checkout line and other little items that we knew they were capable of saving for and buying. As they got older, we added to the list of things we expected them to pay for. For example, if we went to the movies as a family, we covered all the expenses but if they went to the movies with a friend, we might cover the ticket but expect them to buy their own snacks. You can truly customize this any way you would like and since your kids are not the same age you can customize it for each child or keep it simple and do the same for both. One thing we expected both kids to do was to set aside money each week for giving and long-term saving. We used pencil pouches and labeled them, but this was before Pinterest and I am certain there are far more creative and fun ways to do this.
Your kids are definitely old enough to learn about money management, so I encourage you to start now. In our home we decided that our kids would earn $1 per/week for their age in years which they found to be fair and also fun because they knew they would get a raise on their birthday. We gave them the full amount at the beginning of the month, so they had to learn how to make it last. Once they reached high school, we leveled the playing field and gave them both $20/week. When they both found part-time jobs and were driving, we stopped giving them an allowance and shifted the money that had been budgeted for the allowance over to their car insurance. You are truly in the driver seat with the amount and there is no right or wrong answer here as long as it works for your budget. It’s truly a blessing to be financially in a position to give your kids an allowance and the lessons they will learn from managing their own money now are priceless.
Certified Leadership Parenting Coach
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