Many parents pay their children an allowance. The question is – how much? And what should it include?
A common way to decide how much allowance to pay is to multiply the child’s age with $1, so that a 9 year old for example would receive $9 a week. If you think that’s too much, try multiplying with $0.50.
A formula is not for everyone, though. Another approach is to let your child help decide how much allowance it needs. Let the child write down exactly what it would use the allowance for, and then go through it together. The key is that the allowance should never cover everything the child wants – what kind of a preparation for life would that be?
If you don’t like this approach or if your child is too young, you can set the amount of allowance according to you own budget. Write down what you pay every week for toys, sweets, and so on, and then give that amount as allowance. That way, if your child wants an item and its allowance is already spent, you can easily explain that it has to wait for the next allowance until the item can be bought.
The next question is what an allowance should cover. Is it only for small things like magazines and sweets, or should it cover school supplies? If you have an older child you might even want to include clothes in the allowance.
Your child can learn a lot if you include money that should be saved. Saving 10% of any allowance will teach your child to save up for bigger purchases.
The most common question is, what happens when the allowance is gone?
When it’s gone, it’s gone. But you might arrange it so that your child has the possibility of earning some money anyway.
It’s generally not a good idea to pay children for chores. They should do chores because they are part of a family, not because they get paid. But what about if your children did your chores? You could keep a list with the parents’ chores in a central place, and if your child wants to earn some money on the side, it can do one of your chores.
Then there’s of course always lemonade stands, lawn mowing and babysitting. Many children can become little entrepreneurs!