How to Give Your Child an Allowance

Giving your child an allowance will help him or her develop a sense of responsibility and experience handling money.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Piggy Banks
• Bank Account
• Bulletin Boards
• Dry Erase Boards
• Dry Erase Markers

1. Decide how much money you would like to pay your child as an allowance. When you first begin to pay an allowance, the amount is not as important as the lessons it teaches.
2. Determine whether your child will be required to do certain jobs around the house to earn the money. Base the tasks on the child's abilities.
3. Assign several weekly or monthly tasks and write them on a chart on the refrigerator, where they can be marked off when completed.
4. Have clear rules as to when the work must be completed and when the money will be paid.
5. Choose a pay period. You could pay the child weekly, twice a month or even monthly.
6. Discuss the plan with your child. Explain that the money will belong to him or her in exchange for doing the assigned jobs. Discuss where your child will keep the money and talk about how it should be spent or saved. Some parents like to have their children give a portion of the money to charity.
7. Spend some time helping your child understand how to sort and count money.
8. Help your child make purchases so that he or she understands how to pay for an item.
9. Monitor your child's use of the money so that inappropriate purchases are not made.
10. Open a bank account for your child. Many banks offer children's savings accounts for no fee. Teach your child how to deposit and withdraw money and how to balance the account.

Tips & Warnings

• Buy "The Allowance Game," a board game that helps children understand how to sort and count money as well as manage their funds. Play it with your child.
• Some parents pay small amounts such as $1 a week. Others pay substantially more, such as $10 a week. Choose an amount based on your budget and how much money you would like your child to be in control of.