It’s a parent’s responsibility to teach their children about finances. As kids get older, they like to have a little money in their pocket to spend on candy, movies with friends, and countless other things. There are some odd jobs kids can do before they are able to enter the mainstream workforce, but one of the most popular sources of income for kids is allowance from their parents. There are different viewpoints on exactly how allowance should work, or if kids should get an allowance at all. Here are some of the more popular ways you can give your child allowance.
This is the most basic type of allowance. Parents give their child a fixed amount of money each week. This type of allowance doesn’t teach anything about the importance of earning money. It simply gives the child an income stream they must manage.
A more specific type of the Fixed Allowance method, giving the child a certain amount per year of age. For example, a 10-year-old might get $10 a week. As with the Fixed Allowance method, this gives the child an income stream with the added feature of having a built-in raise mechanism.
Fixed Allowance For Responsibilities
With this method, parents assign specific tasks the child must do to earn a fixed amount of allowance. Example: A child could earn $10 a week if they successfully make their bed each day, take out the trash, and dust/vacuum the basement once a week. Parents could also implement this with the Age-Based Allowance method.
Work Based Allowance
Work Based Allowance is the most complicated as well as the most realistic. Parents make up a list of tasks that need to be done, that could (but don’t have to) vary from week to week. A dollar amount is attached to each task. As the child completes the tasks, they earn that amount. At the end of the week, the child gets their â€œpaycheck.â€
However you choose to implement allowance for your child, it’s really only half the equation. While earning allowance teaches that income usually comes at a fixed interval and is based on work done, once the allowance is given the lesson switches to how to manage the money they have. This makes an allowance a great way to teach kids lessons about finances that will benefit them for the rest of their lives.
How about you, Clever Friends, do you give your children allowance? What method do you use?