The amount you give your child for their allowance can vary widely depending on your family’s financial situation, your child’s age, and your specific goals for the allowance. There’s no one-size-fits-all answer, but here are some guidelines to help you determine an appropriate amount:
- Consider Your Family’s Budget: Start by looking at your family’s budget to see how much you can comfortably allocate for an allowance. Your child’s allowance should not cause financial strain.
- Age-Appropriate Amount: For younger children, a few dollars per week can be sufficient to teach basic money management. As children get older, you can gradually increase the allowance.
- Covering Basic Expenses: You might choose to give an allowance that covers specific expenses, such as snacks or entertainment. For example, you could provide an allowance of $5 per week for these discretionary items.
- Tied to Responsibilities: Some parents tie allowances to chores or responsibilities. In this case, the amount could be based on the tasks your child completes. Be consistent with the expectations and payments.
- Educational Goals: Consider the financial lessons you want your child to learn. If you want them to save for specific goals, like a toy or a game, set the allowance at a level that makes achieving those goals possible.
- Local Norms: Research what other parents in your area give as allowances to get a sense of local norms and expectations.
- Allowance Components: You might choose to break the allowance into different components, like saving, spending, and giving. In this case, allocate a portion to each category.
- Adjust Over Time: Be prepared to adjust the allowance as your child gets older, has more responsibilities, and their financial needs change. Periodically review the allowance amount to ensure it aligns with your child’s age and financial understanding.
Remember that the primary goal of an allowance is to teach financial responsibility, so it’s important to use it as a tool for learning. Encourage your child to save some of their allowance, make choices about spending, and eventually budget for more significant expenses as they grow older. It’s not just about the amount but also about the valuable lessons your child can learn through managing their own money.
Brian MacFarland has reached more than 10 million people on his personal finance journey to financial independence. He’s been featured in the Washington Post, U.S. News and World Report, and Lifehacker.
Read more on the About page.