Five Tips for Giving Children Their Allowances

1.     Deciding the Amount:

Decision of money can be done by splitting the age of children in four stages, or bands as you can say; from 5-8, 9-12, 13-15 & 16-18. All these ages have different requirements, so it is necessary that we fix the right amount for right age. But before you do it, you need to first assure that your child knows how to handle money for his age. At the age of 7-8, it is wise enough to start providing them ‘POCKET MONEY’; provided your child is fine with money. If not so, wait for a while. Make him learn about it; for children learn their best in their childhood. Teach them so good facts about money and also the Dos and Don’ts with pocket money. You can even ask the moms of your neighbors regarding this, but keep your decision prior. And also, make sure you don’t put a pressure on your child with this.

2.    Open an Account OR Provide a Piggy Bank for your Children:

Cultivate the habit of SAVING MONEY in your young children from the very start. Make them realize the positive factors of saving money. Say them that by saving money, they can later buy themselves far more worthy and special things they dream of (like books, games, iPods, etc). For many banks allow children’s account at the age of 8, so it’s better if you give them their pocket money on 50-50 basis in the start; 50% to spend and remaining 50% to save. When in time they get used the money they get; they eventually themselves would start saving.

3.    Keep an Eye, but DON’T Ask Them about it:

It is very important that you keep a continuous watch over your child’s spending. This would help you to track what he has learnt about money. If he’s on the positive sign, great; but if he’s misusing it, keep a note & don’t poke him on this. Let him decide about the money. As they say, MISTAKES ARE TO LEARN FROM. Allow him set his own decisions and goals with the money he gets. Guide him when he need your help, but DON’T keep on asking about this yourself. This might prove hazard to the parent-child relation in the future, for too much poking in your child’s life on any issue isn’t right. Guide him for yourself when you think that he can’t handle it, or else LET HIM DECIDE.

4.    NO MORE Money once given the Pocket Money to Them:

Once provided the pocket money for the month, DON’T give them more money until the next month. It is obvious that when it comes to the responsibility of money, children are bound to overspend the money and waste it in the start. Let them learn from this. If they ask for you, say them NO. They might through a tantrum, ignore it. If there is something important your child need, buy it for yourself and then give it to them; for children can misuse the money they gain.

5.    NO Money as a REWARD for Errands:

This is the most common mistake made by millions of parents. One should NOT offer money as a reward to their children for the work they do. Remember, in the house; they are the MEMBER of the house and NOT SERVANT. So it is their duty and responsibility to carry out their own house’s chores without expecting for a reward. When you provide pocket money, so why give money for this? Kids should learn to work without any expectations for their family; for some day they’ll have the family of their own. They can earn money for washing other’s cars or pets, but they shouldn’t be provided money to do their own work. If you feel pleased with your children, offer them gift once in 3-4 months; a gift which you can afford and not your child. But DON’T EVER PAY THEM FOR ERRANDS.