My kids are constantly asking me to buy them things. Their requests for everything from gum to fidget spinners never end.
That’s when it occurred to me that it might be time for them to start receiving an allowance. With a little spending money, they can buy things themselves. More importantly, they can learn to manage money and save.
My boys are now seven and eight, and I know they’ve learned about money and change in math class. They should be up for the task.
I earned an allowance when I was a kid. I’d make my bed or help with the dishes and earn a stipend that I’d save in a piggy bank or spend.
Yet I’m wondering if allowances are out of style. I’ve yet to find a friend that gives their kids an allowance. They might make their child “earn” gum or fidget spinners, but they don’t actually pay their child in actual money.
If you do want to give your child an allowance, how do you know how much to give them? What age is the right age to start?
Leading Canadian financial expert Gail Vaz-Oxlade recommends giving your child a dollar per age a week, so my eight-year-old could earn $8 while my seven-year-old could earn $7. This allows them to learn to spend a certain portion and save or donate the rest. You can start as soon as you feel they are ready to grasp the concept, so perhaps around age five or six.
She also says parents shouldn’t make kids “earn” an allowance by tying it to chores around the house. Being helpful at home is the natural cost of being part of a family. Money and chores should be separate, she says. It’s a teaching opportunity. (Good thing I read that!)
If you’re giving an allowance, it’s also important to be consistent. If you say you’re giving an allowance, you must follow through. Have conversations about money so they know how much they’re earning and also what they’re supposed to do with it. Finally, make sure you’re sticking to the rules. Don’t buy them things they are supposed to be buying with their allowance.
The point is to raise financially literate kids, and, according to the experts, it’s never too early to start teaching them.
Do you give your child an allowance? Do they have to earn it by completing chores? I’d love to know!