A problem that many parents tackle is deciding the amount of money they should give their kids as allowance. It’s a difficult but necessary choice as you certainly don’t want to give them too little, but giving them too much could also cause big issues down the line and should be avoided.
So, exactly how much allowance should you give your kids? We’ll help you figure that out today with this text so you can more easily decide how and how much money your kid needs for their weekly or monthly allowance. This should hopefully help you teach them financial responsibility much easier and not have them have problems managing money down the line.
Why allowances are good
It’s important to understand just why having an allowance can be a learning tool for them, both at the moment and also down the line. A lot of research has been done on this topic and the positive aspects are pretty well-known so we’ll go over them:
–They understand hard work – it’s easier for kids to appreciate the hard work someone does when they understand that positive actions and working hard contribute to earning money. When kids understand that any positive labor is a good thing they are more likely to appreciate all workers, such as their teachers, janitors, or mailmen.
-Teaches saving – the sooner they learn that saving money is important the easier it will be for them to budget the money they make down the line. Many people struggle to save money properly after they’ve gained independence but those who have learned budgeting early on usually aren’t a part of that demographic as they’ve learned to understand the importance of money and keeping a portion of it saved in case they need it for a rainy day.
–Financial independence – being independent (even if only in a few small ways) is a great feeling and helps kids feel a sense of pride. This is especially true of young teens and can help you easier communicate with them if they don’t feel like they’re completely tied down by you in every aspect. Most of them want to feel independent and this is a great way to give it to them without risking much. Low risk but very good reward.
-Generosity – research shows that talking to your kids about giving greatly increases the likelihood that they will donate to charity down the line. It may also help them better understand the situations that their less well-off peers may be in. Oftentimes poorer kids are made fun of due to their financial situation, but if your child understands these concepts then they likely will not be among the crowd making fun of them and instead attempt to help.
How to give them their allowance
There are multiple ways of handling how you give your kids their allowance and they all have their pros and cons. We’ll go over them so you can have a good grasp on each one and best decide which fits your kids.
-Gift-based allowance – some parents decide to give their children a set amount of money regardless of their performance in and out of school. While this is good as it guarantees they’ll have money, it also means that they can think that they are being rewarded regardless of their work and become complacent.
-Reward-based allowance – it’s based on giving your kids an allowance depending on how good they’re doing. For example their performance in school or any extra-curricular activities they may be taking like sports or similar things. It can also tie into the next type of allowance.
-Work-based allowance – it’s generally tied to housework and cleaning. You reward your child by giving them money depending on the quality and quantity of household jobs done. It’s also a great way to motivate them to do so in the first place, which is something that many struggle with as parents.
Each of them is valid in its own way and you can even decide to mix them together, such as giving your kid a small set allowance each week but allowing them to earn more through hard work. It will take some thought and perhaps experimentation to figure out which one suits your kids best as each family is different in many ways.
Conclusion
While the precise amount of money you should give your kid is difficult to say, due to varying currencies and financial situations, it’s very important to remember that the way in which they receive their money is possibly even more important to keep in mind.
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