Allowance for kids has long been used to teach children about money from a young age says Jonah Engler. Many studies have backed this strategy by proving its effectiveness. Kids need to learn that money is an asset, and if they want to buy something, they’ll have to make the effort of saving money for it.
Allowance teaches kids to prioritize their expenses. It also shows them that they’ll have to be patient to save for big purchases. These lessons stay with kids throughout their lives and help them manage their finances better. As a single dad, you might be unsure about how to go about allowances.
However, there are no hard and fast rules when it comes to allowance for kids. There may be a lot of trial and error before you figure out what system works for you. But it’s still an excellent method to incorporate the management of money in your children’s lives.
We’ve come up with a few guiding tips and methods to help you manage allowance for kids simpler. Let’s get started!
How much is the right amount for allowance?
Many factors contribute to the setting of the amount of allowance for kids. It mainly depends on the financial standing of families. Generally, there’s a popular concept of giving kids the number of dollars according to their age each week explains Jonah Engler. For example, if your kid is 7, then he would get $7 weekly.
However, this system doesn’t work well for all ages. Once your kids enter their teen years, they start needing money for expenses like gas, hangouts with friends, prom dresses, etc. So how much money should be given to high schoolers?
It’s essential to give your kids a fixed allowance, but it’s equally crucial to take into account all their growing needs as they grow older. Instead of paying for their significant expenses directly, consider giving them the money, so they manage it themselves. Let’s say you spend hundreds of dollars on your teenager’s expenditures like gas, clothing, smartphone data plans, etc. If you gave them this money to manage on their own, they’d have to learn to create and stick to a budget.
If you can afford it, you should give your children a comfortable allowance. Kids want to feel like adults, and by giving them the responsibility of their own financial management, you’ll be teaching them skills that will help them throughout their lives says Jonah Engler.
Although they will make mistakes and might even blow their budget in the beginning, it will teach them to avoid those mistakes in future. If they make mistakes now, they’ll be more careful when they have to manage their finances as adults.
Should allowance be tied to chores?
Some experts believe that associating chores with monetary rewards sends across the wring message to your children. It undermines the spirit of cooperation with the family. When the sole purpose of doing something becomes money, children miss out on important aspects of social learning and developing a deep-rooted connection with their families and community.
Although chores are an equally important aspect of teaching your children about responsibility, they shouldn’t be tied to allowance or financial rewards. However, some families disagree. There’s no one right way to do things, and that’s why it’s essential to discuss the matter amongst your family and figure out a method that works best for you.
Allowance for kids is necessary for both their needs and teaching them responsibility says Jonah Engler. It will help your kids learn about budgeting and managing money in the long-run.