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All About Allowance
Experts agree that the very best way to teach money-management skills is to give your kids cash, along with control over how it’s handled. Allowances provide hands-on, real-world experience in managing money and teach decision-making, budgeting and the value of saving.
When and How Much
Start giving an allowance by age 6 or 7. Some parents start even earlier, as soon as their kids learn the different values of coins and bills. Children ages 6 and up, however, usually have a better understanding of money and responsibility. The amount of the allowance should be enough to allow your kids practice in spending—but not so much that they won’t have to make choices. Some popular weekly formulas are $1 or 50¢ for every year of age, or $1 for every year of school (e.g. $3 for a second-grader).
The Chore Debate
Most money experts agree that an allowance should not serve as a payment for doing chores. Chores are part of kids’ responsibility as members of the family. However, consider paying your kids for extra, more demanding tasks, such as cleaning out the garage. If it’s a job you would pay others to do, such as baby-sitting, house painting or washing the car, hire your kids instead.
