I recently had coffee with a friend and our conversation wandered onto the subject of chores and allowance. We agreed that teaching our kids responsibility through chores has endless benefits like, sense of accomplishment, pride in their work, teamwork and feeling connected to their family. Then, my friend asked me a great question — What’s the right amount for allowance?
Here are three suggestions to consider when seeking an answer to this question. Keep in mind, every family has their own unique fingerprint and with a little thought can determine what will work best for their family’s ‘allowance sweet spot.’
What’s your budget? According to a study from Cambridge University, kids money habits are set by the age of 7 years. So, seize this opportunity to discuss with your kids what are your families’ needs (i.e., food and clothing) and wants (i.e., toys) and how that sets your family budget. Then, you can talk about what’s remaining in the family budget for allowance.
2. Your Values
First Conversation? For many parents this is the first conversation with their kids about money and their values around it. It’s an opportunity for a parent to take a step back and think about how they learned about money. What influence did their parents or caregivers have on their values toward money? Parents have substantial power at home to foster healthy money skills.
“Allowances shouldn’t be given just because the child thinks they’re entitled to getting money. It should be given as a way to teach values and also to encourage independence.” – Suze Orman, Interview with WalletPop.
3. Grow with it
Start small, grow with it. Pick a number that you feel represents the task(s) at hand and as your child’s responsibilities grow so will their allowance. Take away, don’t sweat the bottom line number now because it has room to grow.
Mix it up to hit the ‘sweet spot.’ Try these tactics together to tackle this question and you are sure to get closer to finding the right answer for your family.
Do you have more tips to add? I would love to hear them.
Shara Nadler, CEO & Founder