Dollars and Sense

Teach kids about money

Allowances can be a fantastic way to teach children about money.  But at what age do you begin and how much should you give per week?  Also, what is your child doing to earn the cash?

Experts agree on some general guidelines:

How to start giving your child an allowance#1 –  When They Are Ready.  You can’t begin an allowance until your child is mature enough to understand the value of what they are doing.  A general rule is around age 8, but depending on your child it could be younger or you may have to wait until they are older and more interested.

#2 – Talk About it.  You shouldn’t just rush out and hand out the cash.  You need to spend some time talking about not only spending the allowance but saving it and donating some as well.  This is a great opportunity to discuss philanthropy with your child and the importance of giving back.  Set aside money each week that can be donated to a charity or cause that may interest or be relevant to your child.

#3 – Don’t Tie Allowance to Punishment.  This is a big no-no.  If your child needs to be punished choose another method to make your point.  Take away a TV and computer privilege, not the allowance.   Allowance money should be designed to reward specific behavior around completing designated chores or responsibilities.

#4 – Don’t Pay Them for Everything.   Setting the table for dinner, doing homework, taking a shower, these are everyday activities that don’t deserve payment.  You don’t want to create a monster by having to pay your kid for clearing the dishes.  This is common courtesy after a meal.   Be clear on your expectations with your kids – let them know what they need to be doing as contributing members of the family, which is different from what they do for their weekly allowance.

#5 – Pay them in smaller amounts.  If they get a dollar for allowance, give them 4 quarters.   If they get $5, give them 5 singles (or loonies and toonies for Canadian kids).   For young children seeing money broken down into smaller amounts is often more exciting and motivating.

#6 – Save and then Spend – Let your child save toward a specific item.  Don’t just let them run out and spend their weekly allowance.  Have a goal and work towards it.  Start saving for a month or more of allowance money and then go out and make the purchase.   Your child will feel like they had to work for something and had to also delay instant gratification – just like in the real, grownup world.

#7 – Open a Bank Account.   Take your child to the bank and if they don’t have an account in their name, open one.  Each week when they get their allowance, you can deposit their money and they can see their balance grow.

About The Author

SusieM
Susie Mac is a children’s media enthusiast and blogger based in Toronto, Canada. She has more than seven years experience in the communications field including television, filmmaking and web production, among others. Susie earned her Master’s of Arts in Communication and Culture from York University.

5 Responses to Dollars and Sense

  1. BaileysMom says:

    I agree that taking away allowance shouldn’t be a punishment but we had an incident recently when our daughter damaged an item during a temper tantrum–no accident. We did require her to set aside a certain portion of her allowance toward paying to replace it. It was expensive enough that she didn’t have enough saved at the time to pay for it. We didn’t take “all” her allowance until it was paid for, but earmarked a large percentage until her obligation was met.

  2. Dune456 says:

    I totally agree with child being responsible for broken items. My daughter just got a job and since I’m driving her, she has set aside gas money to pay me. I’m giving up a lot of my time and gas to help her not have to take the bus. I’m still making her do her chores on her days off. I pretty much never deny my kids anything that they need but I make them work for their wants. I agree with the author that there are certain things you do as part of household and that you don’t give them money just for doing their part. I liked this article cause too many kids are spoiled and it shows in our society of get it now and pay later..

  3. Joanne says:

    The Canadian two dollar coin is a toonie not a twoonie.

    • Joanna says:

      I didn’t even notice that! (Until you brought it up)

      My kids don’t get an allowance at all. They just do their work as they are expected to do. I do give them $2.50 for lunch on fridays. If they wanted to, they can spend it on pizza or save it up. My oldest daughter has been running short on money so we agreed to her cleaning the washroom for $2.50 ($5 if done before noon)

  4. dune girl says:

    I’m taking my daughter to open her first bank account and we had a long discussion about it first. thanks for article.