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Parenting Personal Finance

Do Kids Need an Allowance?

Should you give your child an allowance?

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Allowance is something that has been debated by parents and parenting experts for years.  The debates usually are about four areas:

  1. Giving an allowance
  2. How much allowance to give
  3. Allowance for chores 
  4. Allowance for school progress 

I was confused, and I didn’t know what to do. After debating the topic (to myself), I decided to give the kids an allowance. Even when I was doing it, I still didn’t know if I made the right decision. However, now that my oldest is almost 18, I feel that I did. It makes me feel that they won’t make the same mistakes that I made when I became an adult.

Giving An Allowance

Giving kids an allowance helps them start learning about personal finance.  It gets them thinking about saving and spending their money, as well as start thinking about money goals they want to reach. With allowance money, my son was able to buy a PS4 because he saved for months.  It really helped him learn that it’s great to spend money but it’s equally as good to save it.  

When they reach ages 15-16, then I feel teenagers should get a part-time job. At this point, allowance is stopped because they are making their own money.  

How Much Allowance to Give 

I always followed the advice I got in one of the parenting books that I read that you should give an allowance according to the child’s age.  For example, if he/she is eight years old, then the allowance given would be $8 a month.  You also have to consider your financial situation on how much you can give your child for allowance.  

Allowance for Chores and/or School Progress

Giving money for doing chores and getting good grades in school is not something that I believe in.  I feel that if they do their chores and get good grades consistently, then allowance should be given. However, if they fail to do something, then allowance should be deducted. For instance, if Johnny does not submit his homework, then deduct $1. 

In the end, it is your choice if you give your child allowance and how much.  You should sit down as a family and discuss the topic and come to an agreement.  This is especially true when the kids are pre-teens and teens.  They are good at coming up with loopholes, so by involving them, you can close those loopholes and reduce arguments from starting. 

Please share this post and let me know if you give your child an allowance.  If so, what are the family rules around it. 

Do kids really need allowance? What do they learn by having one?

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