5 final lessons to consider when giving your child an allowance

Child saving moneyIn yesterday’s entry, we talked about a few basic lessons when it comes to giving your child an allowance. Those tips included when to start, how much to give, paying in cash, and using the weekly offering as an ongoing teaching opportunity.

But there’s a lot more to allowances than that. In today’s entry, we cover a variety of other pearls of wisdom when it comes to allowances.

GET IT IN WRITING – At the start of the allowance, discuss all of the details with your child, including how much they’re getting, when they’ll get it, what the money is expected to cover, and what they’re expected to do in order to receive it. You might even write down the arrangement, sign the paper together and post it on the fridge to serve as an ongoing reminder.

DO CHORES COUNT? – Most experts agree that allowances should not be tied to chores. Instead, consider the allowance a learning tool, and handle the chores – and what happens when kids don’t do them – as a separate issue. (Although you might consider offering ways to earn extra money by doing larger jobs around the house.)

DON’T TIE ALLOWANCE TO BEHAVIOR – Withholding allowance because of bad behavior should be avoided because the larger lessons associated with the allowance will be lost along with the punishment.

PAY ON TIME – Agree on a payment schedule, whether it’s weekly, every two weeks or once a month, and stick to it. However often you decide to pay up, it’s a good idea to give the allowance on a night (like Sunday) when kids won’t be able to rush out and spend it all as quickly as possible.

TO LOAN OR NOT TO LOAN – You should resist offering loans or advance payments, but if you do, you might add interest charges as a way to teach your kids about the expenses associated with borrowing money. And it goes without saying, but you should definitely avoid borrowing money from your kids. That can get a little awkward.

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