How Much Money Would You Give Your Child?

How Much Money Would You Give Your Child?

Giving money allowances to children comes naturally as part of their growing up phrases. Children need to experience handling money to learn its value.

However, this can be a headache for some parents when they are giving out an allowance for the first time or when the child is moving on to a next higher stage.

Most parents would probably start to give allowance only when the child is about to start Primary School, and will need to use money e.g. to buy canteen food.

 When should you start teaching about 
 money or giving allowance? 
 How much should you give? 
 How should you do it?

It is never too early to teach your child about money. This can start as early as when your child is 4 – 5 years old. Take opportunities to explain about money and inculcate good money values through daily events e.g. what is an economy, how does a bank operates, what are the different notes and coins, why saving, sharing and spending is important and so on.  

The amount of allowance to give your child may be best decided by estimating how much money you are currently spending on him/ her, and set that amount as the allowance. The amount given should be reasonable and realistic, taking into account the standards of living, the school environment, your child's age and the family's financial situations.

For most young children, long-term goals would be difficult to follow. It would probably be better to give them weekly allowance. For older children, monthly allowance is recommended so that they can practice budgeting.
In addition, it is better to teach your child to manage their own money than for them to request or ask for your permission for every single thing.

Discuss with your child on what the allowance will and can cover. Teach him/ her on how to spread out the given sum and plan for daily uses, as well as how to weigh his/ her choices carefully to keep to budget.

However, do also allow space for creativity and flexibility when your child wishes to spend on something that exceeds his/ her daily planned allocation. He/ she will have to learn to make up for the subsequent days, as long as the final end target is met.

Reference Sources:

Allowances for Children by Selena Hohenstein, University of Florida IFAS Extension

Giving Children an Allowance: Contrasting Views by Robert Brooks, Ph.D. Dr. Robert Brooks