Giving Your Child an Allowance: When & How Much?

Giving your child an allowance can be a dividing idea: Is it something to be earned or is it an automatic right? How do you decide what is a reasonable amount? Is it age based or need based? What is allowance even used for, needs or wants? Is it even necessary? The answer to all of those questions comes down to your preferred parenting style.


One option is a community based allowance system. Under this approach, allowance is allotted based upon one’s contributions to the family community. This means that a child is rightfully recognized for contributing to the family community. It also means that if a child does not contribute, they do not earn an allowance. The goal is to teach them not just the importance of earning your own way, but also personal responsibility within a community unit. Learning that unloading the dishwasher is not a punishment to be borne to receive ice cream money, but a task that then allows parents to join kiddos for ice cream is the main goal of a community contribution based allowance approach.


Deciding how much a child receives can be based on the amount of time it takes for tasks to be completed, effort needed, etc. After establishing the core activities that will permit a child to earn the base allowance amount, consider including several optional tasks that will give them the opportunity to earn some extra money if they want to pay for something outside the norm of their usual expenses, such as going to an amusement park with friends or saving to buy a new gadget.


It’s also important to consider what the allowance may be used to buy. This is often dependent on age. For younger children, an allowance is a way to teach financial skills and savings for wants, but as children get older you can begin to instill a deeper sense of responsibility by shifting responsibility for needs to the child. For example, school supplies are purchased by parents, but if the child wants a “fancy” notebook that is not really necessary then they are responsible for spending their own money to cover the extra cost. As children get older, it is not unreasonable to have the expectation that they are responsible for the majority of their “wants” financially. Of course, all of this depends upon a family’s financial situation, but that fact notwithstanding, allowances can be a great opportunity to teach children many life lessons.

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