Edmonton Money Tips for Parents: Should You Give an Allowance?
There are many ways you can teach your children about money in Edmonton. One way is by providing an allowance. An allowance is usually an allotted amount of money given each week and can be a successful tool in helping your children learn money management and good spending habits in general.
But before you start handing out cash to your kids, there are a few things you might want to establish beforehand to prevent arguments down the road and to ensure expectations are clear. These are a few questions to consider when giving your kids an allowance:
How much allowance do I give?
The first thing you will need to decide is how much to give your kids. Most people base the amount on the child’s age; obviously, a 5-year-old will have less need for spending money than a teenager who wants to go out with friends and save for college. A good way to find out the going rate for allowances is to ask friends, coworkers, and neighbors how much they pay their children.
Will the allowance be tied to chores?
Some people base the allowance on successful completion of chores each week and offer the allowance as a payment for services. Before you do this, however, consider that some children may begin to feel they are entitled to payment for helping out and contributing to the house. Many feel that chores teach children the importance of contributing to the well being of the family unit, and that message can be lost if children are paid to help out around the house.
Will there be restrictions on spending?
Kids being kids, they will more than likely be spending their allowances on things you don’t necessarily approve of. Ideally, all kids would tuck their allowance away each week for college or their first car; realistically, it will be spent on candy, toys, and entertainment. Decide beforehand what an allowance can and can’t be used for.
Will savings be required?
Will you require your kids to save a portion of their allowance, or give them free reign to make whatever purchases they want? Some feel that having a little control over the amount of allowance that is saved is better for children in the long run, since many will opt not to save, especially when they are younger. However, kids who are not required to save their money may still learn the importance of saving, but by then it might be too late. Decide beforehand what you want to teach with the allowance.
Will I use the allowance as a punishment/reward system?
Some parents find it effective to restrict their children’s allowances for poor grades or bad behavior. Conversely, they may pay extra if their kids were particularly well behaved or did exceptionally well in school. Regardless of what you decide, make sure you let your kids know upfront if their allowance will be tied to their behavior.
An allowance can be an effective tool for providing kids with hands-on experiences to manage their money in Edmonton. It can also teach them valuable money management skills while they’re young, keeping them from serious problems in the future, like filing for bankruptcy in Canada. Taking these things into account can make it a more meaningful experience for kids and parents.
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