Giving your child an allowance is a fantastic way to make them economically aware at a young age. Nothing can help your child learn about money better than to let them earn their allowance. How much allowance is appropriate? Should you give an allowance payment for all household chores? What are some economic benefits your child can get from getting an allowance? This is the aim of this article.
The first thing you should do is sit down with your significant other and make a chart of all paid chores. Then you will want to make a list of unpaid chores. These chores are the core things that the child should do as a part of your family. An example of this would be keeping their room clean. No way should you pay your child to keep their own room clean unless you want them growing up with a false sense of entitlement.
The paid chart of chores should be all those chores that are deemed extra. Doing the dishes, raking the yard, or washing the family car are examples of these types of chores. It is vital that you come up with a pay scale before sitting down with your child. It should not be a negotiation. That could quickly spiral out of control. Have the payment amounts figured out before bringing in the children.
How much is to much? This is a decision that each family would need to make for themselves. It is not logical to put a specific number on this as it really depends on how much you can afford, and how you plan to use the money.
Some common ways to maximize the benefits of giving allowance would be to require the children to save a percentage of it. This will teach a wonderful habit, and allow for the child to have something to draw on when they move from the nest. Done correctly, the child will never miss the money, and neither will you. It could even stand as the child’s future retirement if you set it up as such.
Another great use for saved allowance money is to put the money away for college. It is very important to let your child be involved with the saving of the money and why they are saving it. If a child saves for college from the age of five, and it is explained to them along the way, they will be much more driven to do well in school so that they can go. This is double the benefit for the money!