Teaching Kids About Money

What is children’s allowance? It is giving your child an amount of cash so they can use it every week. The whole purpose for a kids allowance is to educate them how money works in society. It also builds financial skills such as counting, saving, budgeting and making money. To give children allowance is to instill a sense of responsibility to them. This is how they are going to grow. By giving pocket money for kids, you are giving your child practical uses of what money can do for them.

A children’s allowance amount depends on how old they are. The general rule for allowances for kids is $1 per age. So if they are 10, you would give your kid allowance of $10. If they are 12, you would give them an allowance of $12. An allowance for kids will teach them how much items cost as they grow up. Naturally as they get older, their costs increase, therefore the childrens allowance should also increase.

Now below are the main factors on how much to give an allowance for children:

1. Age – As described above, a children’s allowance depends largely on their age. Obviously a child who is 16 will receive more money than a child who is 8. It’s most likely because of their needs and wants cost more as they grow older.

2. Family Income – Allowance for children will also largely depend on how much you earn. A family which live in more affluent areas or a higher-socio economic society will most likely have a higher kids allowance than a family which is in a lower one.

3. How many children you have in your family – The more children you have, the more money you will have divide up. So a family with 4 children may each receive less than a family with only 1 child comparatively.

4. What other children are receiving as an allowance – you may ask around other parents on how much they give their child to give a fair idea on allowance for kids.

AGE OF CHILD

Below is a general outline of how much pocket money for kids you should give according to their age group

TODDLER AGE 0-6

Usually, you don’t have to start giving your child pocket money until they are about 6 years old. A children’s allowance for this age is just so that they have an initial responsibility of money that is given to them. Don’t give them too much, maybe $5 or $6 when they are 6 years old.
Of course you can start younger if you wish. They may understand the concept of money that it is used for goods in return. You can start them at 4 years old and give them $2 to hold in their back pack or pocket.

A great way to teach your children about money in this age is to take them shopping with you. Show them what you are doing with each item such as looking at the price, and then what you do at the checkout counter. The allowance for kids can be used here as you allow them to buy one item at the shops. Teach them how much items cost and if the kids allowance either is below that cost or matches it, your child can buy that item.

AGES 7-12

Increase the allowance for children every year within reason. They may want to save for something more expensive such as a bike. Or they will want to buy the latest Playstation game. Teach them how to budget properly in the age bracket. To give children allowance in this age means to trust them a bit more on what they do with their money. Allow them to make mistakes, as people usually learn better through these experiences.

As the parent, you are still solely responsible for all their needs and wants. Therefore you are the provider for allowance for children and will need to teach them good spending and saving habits here.

AGES 13-18

At this age, you may want to increase the allowance for kids significantly. Why? You could give them the added responsibility to have a clothing allowance each month so they are in charge of buying the clothes. Therefore shifting the responsibility from yourself to the teenager. Teach them that they have to use it wisely or they will blow it all off in the first few days. A teenagers allowance needs to be thought out carefully as this is the stage where they will cement their money habits for life. Allowances for teenagers reaching adulthood will most likely be their first step into how the economy works as a whole and that money doesn’t grow on trees,  but is hard earnt.

In conclusion, how much you give for allowance for children depends on you and your family’s situation. A teenagers allowance is going to be much more different to a younger childrens allowance. At the end of the day a kids allowance gives them an opportunity to be financially responsible and gives you the parent the opportunity to teach kids about money.