Planning your child’s allowance is the first step to introducing him to the value of budgeting and understanding the value of money. Read up on these parents’ top concerns and what our experts recommend.
When should you start giving your kids an allowance? What’s the best age? Melissa Cruz, Parenting Cluster Head at CEFAM (Center for Family Ministries), recommends that parents star by observing their children first. Trust the child with a small amount first and observe how the child will handle the money. This will help you gauge his spending habits and what his idea of money is. “This will depend, of course, on the maturity of the child,” emphasizes Cruz.
How much is the ideal amount (depending on age), and how much is too much? Anna Mae Tuazon, a registered financial planner and researcher for a research institution, urges parents to use two points of evaluation to gauge how much allowance they should be giving their child. “The first point of evaluation is need. Second, evaluate how responsible your child is in safekeeping and spending the money. “
Tuazon also points out that age plays a big role, as needs such as food will be affected by the child’s size and appetite. How responsible a child is also plays a part as he may already be entrusted with emergency money, or allowance beyond food and transportation needs.
According to Cruz, on the other hand, the amount will have to depend on the family’s set of values and budget. It’s also important that you take into consideration certain factors such as family income and the school the children go to in order to determine just how much allowance to give your child.
How often should you give your child an allowance? Weekly? Monthly? Daily? What’s the best way for him to manage it? “A weekly allowance will teach children how to budget and will reduce their temptation to spend on unnecessary things,” says Tuazon. “However, if the child is still not ready to budget, the parent may opt to begin with a daily allowance, then a bi-weekly allowance, then progress to a weekly allowance.”
Cruz suggests to depend the schedule of giving the allowance on the child’s age. Give daily allowance to younger children and weekly allowance for older children who are already prepared to start budgeting their money.
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