Money Talks: Should Your Child Have An Allowance?

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The benefits tend to outweigh the negatives and with nearly every negative reason to not give allowance, there is a lesson that can be learned.

How Much Allowance Should My Child Receive?

The million dollar question is how much allowance a child should receive. This will of course depend on the age of the child and what the child is doing to earn an allowance. If your family is larger, that may play a part in determining the amount as well.

The important thing is to be reasonable when determining the amount that should be given. Younger children usually won't negotiate with you and will happily take whatever you give them. Preschool-aged children may earn $1 or $2 a week. As children get older, their allowances should also increase. Of course, the responsibilities should also increase. Instead of doing weekly chores, as children get older they may take on daily responsibilities.

It is important for families to sit down together and discuss this. Getting a child's input and opinion can be very helpful. Of course, the final decision should be made by the parent but it is beneficial for a child to learn how to negotiate and discuss financial issues.

You will also need to decide how frequently a child should receive allowance. The standard is weekly, but you may wish to give a daily, bi-weekly or monthly allowance. Keep in mind that with young children it may be difficult to earn an allowance on a monthly basis. That can be a very long time to wait.

Not only should parents discuss with their children how much their allowance will be and how often they will receive it, but they should also discuss what is expected to earn the allowance. There must be clear rules and expectations established.