Other financial experts recommend an allowance equaling one dollar for every year of a child’s age. Whether you choose a commission system or give allowance separate from chores, the amount is most appropriately determined by considering your child’s age, the lessons you most want to teach and what your child will be expected to pay for.
- Preschoolers can begin to recognize different coins and how we use money – to buy the things we need or want, to save in a piggy bank, or to give at church or to a charity.
- Elementary-age children should be able to start thinking about how to divide their allowance among spending money, savings and charitable giving. Some piggy banks come with three separate compartments for these purposes.
- Tweens start going places without their parents, and they will need money along the way. This can be an excellent opportunity to demonstrate the need for budgeting and prioritizing spending. Since you bought new earrings at the mall on Saturday, you may not have enough money left to go to the movies with your friends on Sunday. Dealing with the consequences of a mistake in money management will be very educational, and parents should not “come to the rescue” with more money.
- As your children become teenagers, they will start jobs, open checking accounts and, as they graduate from high school, receive credit card offers. It is important for you to monitor and teach along the way. Every teenager should learn how to balance a checkbook and how to live within his/her means. You can consider increasing allowance to cover things that you used to pay for – clothing, cosmetics and gasoline to name a few.
Add financial responsibilities as your children grow, and you’ll help them become educated, financially fit adults.
Submitted by Christine Carrels, “Aunt C.” to Cole and Brynn, and the marketing director for Marine Bank.
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