How to Decide on an Age Appropriate Allowance
Once children reach a certain age, an allowance becomes a necessity. Not only will an allowance help your child learn to effectively manage money, but it will also reward them for hard work and work as an incentive to do their best.This article will explain how to set an allowance and how to monitor their money management.
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Instructions
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Deciding on an Allowance Amount for your Child
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Determine what chores your child can do to earn an allowance. As a general rule, children should be expected to take some personal responsibility such as cleaning their bedroom and picking up after themselves without being rewarded with an allowance. However, bigger household chores such as lawn mowing, dish washing, dusting, and cleaning bathrooms deserve an allowance.
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Decide if you want to make a set rate for each week that every chore is done or if you want to pay a certain amount for each chore. For example, you might decide to pay $1 for each time that your child does the dishes or $5 for each time they mow the lawn. Or, they can have a list of daily chores for which they are paid one set amount.
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If they are to be paid by the chore, create a chart. This will serve as a reminder for your child as to what chores they are expected to perform to earn their allowance. It can also give you a guide for payment each week. Have them sign off on each completed chore and you should check it daily or weekly to ensure your child is really completing the chores they say they are.
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Determine what expenses their allowance is supposed to cover. For example, if their allowance covers clothing and lunch money, you will want to give a larger allowance than if your child only has to pay for entertainment and small purchases with their allowance.
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Expect to increase their allowance as they grow older or as responsibilities increase. As a general rule, you can increase responsibilities by 20% each year and allowance by 20% each year.
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Set-up a checking or savings account for your child. Expect them to get a debit card and manage their own account. Teach them how to do this and then monitor their account on a daily basis until you feel confident that they can manage it on their own. After that, you can just monitor daily. Encourage your child to put as much as possible on the debit card as opposed to pulling cash out. This will help them and you to better track their expenses.
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Only you can decide what a fair allowance is. A variety of factors will come into play such as activities they are involved in, region of the country you live in, the age of your child, and what expenses they are expected to cover.
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Tips & Warnings
Give your child one or two days a week where they are not expected to do any chores. This will help recharge their batteries for the week and they will be more likely to perform well.
Give breaks around test and exam time to give your child extra time to study.
