Money management skills are not an innate gift that is given to all of us. We must learn and be taught these important life lessons by experience. It is during one's teenage years that these principles of money management start being taught with great emphasis because it is during this time that your child should start to have financial responsibilities. An allowance is a perfect opportunity to begin teaching your teen important monetary principles in a controlled environment.
But when exactly should you start giving your teen an allowance? The answer depends on the maturity level of the teen. First, your teen must be able to show some control over the earnings that they will make. A teen must have the foresight and self-mastery to be able to work and then save to be able to earn an item that they want. If your child spends their money the second that they are given their allowance, they may be too young for it.
The second factor that you should consider when deciding when to give your teen an allowance, is their ability to handle their current responsibilities. You do not want to overwhelm your teen with lessons of money management if they are having trouble in school with social relationships, etc. Remember that an allowance is a monetary reward based on work that was done in the home beyond what their normal responsibilities are. A child should not be paid for good performance in school, nor should they be paid for their regular household chores. An allowance is an incentive for doing more than the "minimum" which you expect from your child.
A third factor to consider when determining when you should give your teem an allowance is what sorts of financial obligations your child has. Does your teen have to pay for anything? If not, there is no reason for them to need to receive money. If your teen currently does not have any financial responsibilities but you believe that it is time for him or her to learn about finances, it is a good idea to start making them responsible for costs that you previously took care of yourself. Some examples would be to have your child be responsible for buying his yearbook, school lunch, or earning his own money for tours or special field trips.
If you are still unsure as to whether or not it is time for your teen to start getting an allowance consider the following questions that you may ask yourself:
•Is my teen able to understand mathematical concepts of money such as addition, subtraction, sales taxes, interest rates, and any other basic mathematical concepts that may have specific applicability to their current situation?
•Does your child have an understanding of how everything has a cost and that those costs are relative to each other? For example, does your child understand the concept that instead of spending seventy five cents a day for candy they can save that money for several months and be able to buy something much more substantial?
•Can your child delay gratification? Many adults struggle with this question. The basic point is that your child should be able to see that their allowance was the result of hard work and should value it enough to be able to take their time to carefully plan how they will spend their hard-earned money.
If you feel like you are able to answer in the affirmative for each of these questions and you and your teen are ready to begin learning about personal finances and responsibility then the time is right for you to start giving your teen an allowance.