Giving an allowance is a basic child-raising concept that can feel complicated or just varies depending on your parenting style. How much should you give? How do you teach financial responsibility from a young age? How do you get kids excited to save money?
At Be Secure Financially, we believe becoming financially secure should be fun! So giving your kids an allowance, or rather making them earn it can be fun too! Summer is all about fun, so if you are just starting to think about an allowance, this is a great time to begin.
This seems pretty basic, but starting with the basics with money is a necessity with children. Many children believe you just go to the bank and the ATM pops out however much money you would like. (Wouldn't that be ideal?) Maybe these children are on to something after all! Show them one dollar, a $5 bill, a $20 bill. Tell them they will earn a certain amount of money based on whatever the chore or task is.
Explain How Money Buys Things
Let your children know that based on what chores they complete, they will earn a certain amount and that amount can go to something they want to purchase or even just save for. Let them know that if they spend that money, it is gone and they won't earn anymore until they complete more chores.
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Decide How Much You Will Give In The Allowance
This is the part that is a personal preference. Some parents just give money based on the child's age. So, if you hare 6 you get $6 every week or every two weeks. Or if that is too much, you get half your age, so $3 every week. You can even start with literal pennies. Kids sometimes just like to take part in an activity and like to have a savings jar, even if it means saving only dimes and quarters. Other parents choose a certain dollar amount based on a chore, cleaning your room is $5. Bringing the dog her food is $2. This is your preference.
Plan and Dream
Before you start giving the allowance, talk to your children about what they want to buy. Maybe it is a Barbie, maybe it is a video game, or maybe it is a summer slip and slide. This is a fun part, have them start naming things they'd like to buy. You will laugh at some of the answers: a house, a car, a trip to Disneyland! Be realistic about money, $5 will buy you a Care Bears DVD, not a new Four Wheeler. Take them to Target and show them that the doll they want costs "this amount".
Don't you just love when you get rewarded? You love your annual holiday bonus, or the extra thousand if you exceed a sales goal. So, reward your kids yoo. If she saves $20, give a bonus of $5. If he reaches his goal faster, take him out for ice cream.
With an allowance, make it a learning activity, but also fun!
Here are some activities you can give an allowance for:
Cleaning your room
Unloading the dishwasher
Helping with the laundry
Taking out the trash
Swiffering the floor (kids love to Swiffer, I mean, who doesn't? :)
Setting the table
Put away your toys
Make your bed
Help you cook
Basically anything you want them to do!
Let them know they should do these things anyway, but an incentive of learning and managing money can be a summer activity that is budget-friendly too!