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  • The Magic Number for Allowance, According to Real Moms

    What to consider when coming up with an amount and how to turn it into a teaching moment.
The Magic Number for Allowance, According to Real Moms
  • Giving your kids money is not just an act of trust; it’s also a lesson on responsibility. “Financial literacy is important for kids of any age in order for them to come up with more responsible and informed [financial] choices,” says Tanya, 39, a mom and a lawyer.

    One of the best ways to teach your children how to spend and save money is through their allowance. “Saving and budgeting are life skills we use throughout our lifetime. [It’s] advantageous for our kids to appreciate, develop, and practice these skills at an early age,” says Trina, 45, a mom and a family life and child development specialist.

    Giving a daily or weekly allowance to your kids can be tricky, but here's how real moms do it:

    Consider your child's needs when coming up with an amount.

    “What has worked for me is to ask the kids—or see for myself—the prices of complete meals, snacks, and drinks in the cafeteria. I compute their allowance based on a complete meal and drink, a [morning] snack and drink, and [an afternoon] snack and drink.” - Trina

    “I give them each P70 per day. In case they need to meet in school [over the weekend], I give them P100.” - Yvette, 42

    Give your child opportunities to practice smart money habits.

    “When we’re shopping for school supplies, I let them hold their own lists and decide on the brands that they like. They pay for [their own shopping after I give them a] budget for the total amount of school supplies.” - Yvette

    “We teach [my son] the value of money by giving him only enough to buy a meal and some snacks in school. If he wants to buy something else, like NBA cards or a pair of shoes, he needs to save his allowance [or earn extra money]. Sometimes he sells candies in school, sells and trades NBA cards with his classmates, or he'll [get a token after doing] a chore. Whatever he gets, he divides it into three. One [to put in] his wallet to spend, another [to save] for his dream basketball shoes, and another for [his spending money when we're on] vacation. Also, the money he receives as birthday and Christmas gifts is automatically saved in a bank account and cannot be touched until he's [older]. We also teach him how investment works and how his money could grow.” - Maricar, 31

    Encourage your child to practice simple math.

    “I started giving [my kids an allowance after] they’ve already learned the concept of simple arithmetic and the value of money.” - Rebecca, 58

    “I offered to give them an allowance to teach them the value of money, budgeting, and saving, as well as to practice their math skills—addition, subtraction, fraction.” - Tanya

    Share real-life experiences to simplify the concepts of saving and budgeting.

    "If they want something, I quote them the price of what they like in terms of how long I need to work to afford it. For example, ‘Mommy needs to work XX days to afford a toy.’ I tell them that based on how much Mommy earns, I can only afford XXX amount per month of full-time work." - Tanya

    “Just like our kids, my husband and I have a weekly allowance. Whenever we manage our expenses well and have [extra funds], we either treat the family to a movie or save for a weekend trip or a new item for the home. Through the years, we see that they do the same with their allowance.” - Trina

    Make sure the lessons and skills your child learns can help him or her in the future.

    “It is very important to let our children understand that they always need to live within their means. We want them to understand that they need to be self-sufficient.” - Yvette 

    “It's important for them to learn about saving and budgeting, so that when they are bigger and old enough to [work for] a salary, pay [their] bills, and [fund] their own hobbies and vacation, they already know how to handle their money and [won’t] end up penniless.” - Maricar

    “They will learn to be resilient if the budget gets tight, and, at the same time, learn the value of [saving]. [It comes] in handy during emergencies or when times get rough, [particularly when there's an] illness in the family or even a loss of income. When this happens, you have savings as back up." - Rebecca


    Parents want what’s best for their kids, and nurturing a sense of responsibility and self-sufficiency will go a long way to ensure their financial future. Another way you can help them is by being financially prepared for their education.

    Insular Life offers investment-linked insurance plans, such as Wealth Assure Education and Wealth Secure Education, that provide you with insurance protection and help you sustain your child’s education in light of any unforeseen events.

    To see which plan best suits your needs, visit Insular Life's website or follow it on Facebook.

This article was created by Summit Storylabs in partnership with Insular Life.