Parenting Tip: The Art of Allowances
If you want to teach kids how to be responsible with money, they need to have some of their own. In most cases, this means giving kids an allowance. An allowance can be an important teaching tool
in helping kids understand how money is earned. Here are a few tips:
Tie the Allowance to Their Age
One common method in determining an allowance is to tie it to the child's age. For example, you can give $1 per year of age every Friday, once a month, or any amount you can afford. This will give the child a pool of money to help them learn how to budget.
Tying an allowance to chores helps kids learn how to earn their own money. First, think about age-appropriate tasks around your home. Kindergarteners can dust or pick up toys and put them in a basket. A middle schooler can sweep or fold laundry. High schoolers can mop, vacuum and do dinner prep such as chopping vegetables.
Determine how you will tie chores to an allowance. Will you pay a certain dollar amount per task? Will the child have to complete specific chores per week to receive their allowance? Write down the rules and have a family meeting. Set up a chore chart to recognize progress. If you want to randomly assign chores, write down jobs on slips of paper and have kids draw them out of a jar.
Give Job Titles
Give kids ownership of their roles around the house with job titles. The “chef” can set the table, help with simple food prep and rinse dishes after dinner. The “vet” can feed and comb the dog. The “maintenance manager” can sweep, sort recyclables and take out the trash. Have kids rotate roles so that everyone gets a turn at each job.
Award points for good behavior or stellar grades and tie them into your allowance system. This can help motivate a child who is having difficulty completing tasks. Points can be converted to dollars that are added to or that make up the allowance.
Set Up Savings Goals
Is there an item that your child really wants? If so, map out how long it will take them to earn the money. Have them set aside a designated amount each week to reach their goal.
Teach Them to Save
Explain how long-term and short-term goals work. If you are paying an allowance in cash, set up jars in their room and have them divide up their allowance for things they want now, like a candy bar, and more expensive items they need to save for, like a new football or doll. If you want to go cashless, try kid-friendly apps like RoosterMoney, ChoreCheck and BusyKid to help your child keep track of their money and divide it up into different categories. Or, help them set up a savings account and track funds easily online.
Giving an allowance can be the first step in teaching your kids how to manage money. Learning how to budget at an early age will help them as they move towards independence.
Julie Landry Laviolette is a freelance writer who specializes in personal finance, health and living well. Find her on Twitter at @JulieLavio.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank does not endorse nor is affiliated with the companies listed in this article.