If your child is old enough to understand the concept of money, it’s probably time to start thinking about allowances. Most experts suggest you start a youngster’s financial literacy lessons early, by stressing saving, sharing and spending that allowance.
The first thing to determine is how much and how often?
FamilyMint says the average family pays 50 cents a week for each year of the child’s age. For example, a 6-year-old would get $3 a week while a 10-year-old would get $5. Others tend to pay $1 per year of age per week.
Some families pay allowances weekly, others monthly and still others somewhere in- between. There’s no right answer except the one that works best for your family.
Starting Saving Early
Remember, you can get your youngster in the habit of saving early on, as a member of a formal savings plan like Community Bank’s Green Team TM Kids Club. It’s a fun way for kids to learn about money and the importance of saving for the future — and they’ll enjoy Fillup the Frog, the Club mascot. They’ll even be able to meet Fillup in person at various events in the community!
The Green Team is open to all children age 12 and under who open a Kids’ Club savings account. Members receive a special membership card, a free Fillup the Frog bank, a savings passbook, and a subscription to the Green Team newsletter, “Ribbiting News.” They even receive a card on their birthday and gifts for reaching saving milestones.
Tracking the 3 S’s
There are a number of ways to keep track of allowance/chores activity, from check-sheet lists posted on the ‘fridge to whiteboards to notebooks and stickers. And digital scorekeeping is now also an option.
My Job Chart is a free online chore chart and reward system for organizing and motivating kids to learn first-hand how to Save, Share and Spend their allowance.
Chores or No Chores?
How much and how often are easier to determine than whether to tie an allowance to chores around the house, school grades, or some other incentive.
There are two schools of thought on whether a child’s allowance should be based on his or her performance of household chores. One side cites the value in doing work and being rewarded for it. The other side says the practice can cause friction in the household, where routine chores are to be expected of a member of the family. They also say it dilutes the self-motivation drive.
Actually, there’s a third side to the debate, as well. This position sides with no reward for routine chores, but payment for tasks above and beyond the usual household routine.
Which side wins in your home? Chores, no chores or something in-between?