How to Determine Allowance

Opinions on determining allowance couldn't be more varied. Some parents don't believe in giving an allowance at all, some believe that it should be given in reward for chores, while others believe that an amount should be given every week, regardless of chores. Here are a few helpful tips to keep everyone's wallet padded while you determine your children's allowance and teach them to manage money.

Instructions

Difficulty: Challenging

1. Figure out which camp you belong to. Before you can determine the amount of the allowance, you have to determine your personal views about paying your children. While it's been customary to give allowances in relation to household chores, recent expert opinions have changed on this approach. Experts feel that participating in household chores should be mandatory as a part of contributing to the efficient running of the home, and that children should be expected to contribute. It's a personal decision, but leaving chores out of the equation, you still need to come up with a number.
2. Take the opportunity to teach your children about money and expenses. Sit down with your children and discuss what they consider to be their expenses and what you consider to be their expenses. Come up with a compromise between essentials and non-essentials. Decide whether you expect them to pay for school lunches or gas out of their allowance, or whether they should use it for discretionary items only. Take all of these factors into consideration before setting an amount.
3. Consider a gas allowance for the driving teen. If your teen has his own car or makes use of an extra car on a regular basis, you can offer to provide a weekly gas allowance that would equal the cost of filling the tank. (You can adjust this to how much he drives, and provide it on a bi-weekly or monthly basis.) Be clear that any gas he needs over this allowance comes out of his own pocket, either from his regular allowance of a part-time job.
4. Give your children a bi-annual allowance for clothes. If you really want to educate your child about just how expensive all those designer items are that she craves during the school year, give her a clothing allowance in the fall and spring. Come up with a realistic amount, and offer to buy the staples such as underwear, socks, shoes and coats.
5. Offer opportunities to get some extra cash. Whether or not you're paying for chores, give your kids the chance to grab some more green by doing things around the house that you might pay someone else to do. Jobs like lawn maintenance, painting, shoveling snow or pool maintenance are great ways to get the jobs done, teach your kid the value of getting paid for hard work and give him some extra dough for something special.
6. Be open to reevaluation. After listing expenses and determining how much your child should be paid each week, be ready to review monthly whether this amount is working for your child. Discussing allowance regularly keeps you in touch with where she's spending her money and gives you further teaching opportunities. It doesn't mean that you have to raise her allowance every month.

Tips & Warnings

• Keep in mind that the older your child gets, the more money he will need. He isn't trying to swindle you; his needs just become more expensive as he ages.
• When it's time for a part-time job to supplement the allowance, take your child to the bank and open a checking account in her name. She'll learn to manage her money more efficiently by making deposits and writing checks.
• Don't give out money for good grades or good behavior. These things should just be expected, not paid for by parents.