Many parents choose to pay their children allowances rather than handing out money seemingly on demand. While this may work well for some families, others may not be well structured or prepared for this style of money management.
To help you consider the many facets of children’s allowances we have put together the following questionnaire. Match your total number of “yes” answers to the scores at the end to better determine if you should pay your children allowances.
Take the Questionnaire:
Do you have a consistent income? 2.
Do your children have piggy banks or savings accounts? 3.
Have you thought about when and how you will pay allowances? 4.
Would you be prepared to cut or withhold allowances as needed? 5.
Have you decided what the allowances must or may not be spent on? 6.
Have you spoken with your children about money management skills? 7.
Do your children have experience with budgeting and saving? 8.
Have you thought about how much allowance you would give each child? 9.
Do you know what you are basing the rate of allowances on? 10.
Do your children have set responsibilities around the house? 11.
Do you know when you will stop offering/paying allowances? 12.
Will paying children an allowance create less stress and tension?
Should You Pay Your Children Allowances?
“yes” to between zero and four questions
– then you are not likely ready to pay your children allowances. It may be that you like the idea of your children managing their own money, but you have yet to really think about the details of this plan. At the very least determine how much you would pay each child, why you decided on this amount and what you would expect and/or forbid you child to buy with this money. Before announcing any decisions, watch you children with money and determine if you need to talk to them about any particular issues. If you do decide you want to pay your children allowances have a forthright discussion with them about their new responsibilities and then consider a trial period to work out any unexpected problems that may pop up.
“yes” to between five and eight questions – then you may be ready to pay your children allowances. You probably have a vague idea about why you want your children to handle their own money and what you would expect from them once they begin to receive an allowance, but you may not have considered the practicalities of this arrangement. Look into opening bank accounts for your older children, decide on rules for their spending and saving, and pick a date and method by which you will pay these allowances. Consider talking to your children about allowances and incorporate their opinions into your final decision.
“yes” to nine or more questions – then you are most likely ready to pay your children allowances. You seem familiar with the decisions which must be made, for example how much each child should receive and if an allowance should be tied to household chores, and confident in your children’s familiarity with handling money. Don’t assume, however, that your children will automatically know what to do with a regular allowance. Speak to each one in turn about how much they might receive, how much you expect them to save, and what they must and may not buy with it. If you have a specific end date in mind for the allowance, such as an age by which you expect a part time job, make this clear from the start.