Children Learn What They Live (revised)

When people first become parents, they don’t often think about a simple fact of life: children grow, and as they do, their need for independence grows with it. When once they were satisfied with a simple, “no, you don’t need that right now,” they begin to desire some sort of fiscal responsibility. What are parents to do when their children reach this milestone on the road to maturity?

By the time they are about ten years old, children’s desire for money to call their own has surfaced. Some parents opt for the “allowance” option, a tried-and-true form of payment to children who then are able to spend the money they receive as they see fit. But forming a plan for an allowance can be more complicated than is at first thought. How much money should the child receive? Should he be expected to work for it, or should the allowance be given on any condition? What should the child be expected to finance on his own? Those are only a sampling of the questions that arise when the decision to grant an allowance is made.

Families can often become “bogged down” into the particulars of giving an allowance, and often the overall benefits of teaching children to finance become lost due to indecision or a simple lack of information. The following are some guidelines meant to take the mystery out of Allowance Day:

1. Determining Allowance Amount-
Many finance experts agree that allotting an amount equal to half of the child’s age per week is an adequate amount of money for at least the beginning. Too much money could be overwhelming to a child who has not yet dealt with pocket money of his own, and too little can be just as frustrating. Of course, the standard of living in your household and rate of inflation for your area should be of some consideration, but keep in mind that this monetary bequest, especially at first, should not exceed what he is capable of handling.

2. Teaching Them to Budget-
Children who receive an allowance but still get their needs (and whims) met by parents or other family members will not reap the benefits meant to be imparted. Now is the time to begin saying “no” to requests such as small toys at a department store or candy money for the movies. If the child spends his allowance in a day, then he must wait until the next allowance day before he is able to fund more frivolous purchases. Parents often adjust their expectations in this area as children grow; teenagers who receive more money may be expected to buy clothing, finance field trips, or pay their own way to various amusements.

3. Working Hard for the Money-
Should children be expected to perform household duties in exchange for an allowance? Some schools of thought are “no” because family chores and responsibilities should remain separate from monetary compensation. Some parents opt for “yes” as a means of teaching children the concept of earning. Still another method-perhaps the best-would be to mix these two ideas. Some chores could be dubbed “money chores” while others are simple responsibilities regardless of reward.


4. Changing the Rules as Children Grow-
Obviously the needs of teenagers cannot compare to the needs of ten-year-olds. Adhering to the “half-age” concept might work well for several years, but once a child reaches driving age, what should be expected of him? Many families advocate that a teen of driving age should be capable of holding down a part-time job in addition to schooling. However, it might be prudent to note that the United States is the only industrialized nation that expects its teens to work. If parents prefer that the teen remain job-free, an allowance adjustment should be considered, discussed, and agreed-upon among family members. Allowances for teens can work as long as communication lines remain open and teens are clear about expectations.

As with other aspects of parenting, creating and maintaining a plan for allowances-and sticking to it-can seem time-consuming and tiring, but the benefits reaped from this effort will last children for a lifetime. By encouraging children to think for themselves and plan ahead in terms of finance, parents can guarantee a bright financial future for their offspring.