As your kids get older, you have most likely noticed an increase in them asking you for certain things. They want the latest toy, they want to buy candy, they want a new video game. Instead of making them wait for birthdays or special occasions, many parents give their children who are too young for jobs an allowance.
There are many benefits to an allowance, but whether or not you decide to give your children one is up to you. If you are asking yourself whether or not to give your kids an allowance, consider the following points.
Are there any benefits to an allowance?
There are many different aspects of money management, and an allowance teaches kids a number of them, including:
Savings. When parents stop springing for treats and toys and other little luxuries, kids will learn the value of saving as they begin saving their own money for the things they want. You can also help kids figure out how long it will take to buy something if they want to save for a specific item.
Budgeting. Some parents will give their kids an allowance with the stipulation that they must save a certain percentage of it. This is a good way to teach kids how to budget by setting aside a certain amount to save and then budgeting the rest for their wants.
Spending habits. Kids will learn how to manage their spending through trial and error as they learn to deal with their allowance. If your child is saving for something, then ends up spending all the money on something else on a whim, he will have to learn the consequences.
Should my kids have to earn their allowance?
For kids who are too young to work at regular part-time, after school jobs, allowances are a good way to teach kids to earn their money. While some people give their kids allowances for chores around the house, others may find it to be a bad idea. For one thing, kids who are paid to do chores may not learn the importance of contributing to a family; thus, they may only chip in around the house if they think they're going to be paid for it.
However, parents who do give kids an allowance for helping around the house often feel that their children are learning to work for money. They also feel like they are not just giving their children handouts.
A good compromise would be to give kids an allowance, but then allow them to do extra jobs around the house for money.
How much should I give my kids?
The amount of allowance you give your children is dependant on a few things, such as what you can afford to give them each week and how old they are. As a general rule, kids can start getting an allowance around four or five years of age. A rule of thumb seems to be a dollar for every year of their age per week, give or take a few. As kids get older, their tastes and wants get a little more expensive, so an allowance should reflect that.
Whether or not you decide to give your kids an allowance is entirely up to you. However, they are beneficial to kids in many ways by letting them learn money management skills at a young age.