Allowance for kids – such a loaded topic, bound to start plenty of arguments. Is there a right method?
In Singapore, fixed allowances are usually given on a daily or weekly basis for children to spend on meals in school, with an increment for the child’s age.
In America, it is not unusual to find parents tying allowances to chores or good behaviour. Around the world, we have observed a variety of allowance practices that all reflect different cultural values.
Most importantly, it is crucial that you are aware of the implicit messages you are sending to your child through your allowance system.
Fixed weekly allowance for kids
A fixed weekly allowance has the merits of being simple and easy to manage.
Some parents who practice this system even declare that as children, their duty is to concentrate on school and not have to worry about anything else! Implicitly however, this system creates the mindset of a salaried employee, and trains children to be content with scheduled payouts of money later on in life.
Allowance per chore
In contrast, families who tie allowances to chores believe that children need to learn that there is no free lunch and money has to be earned. Under this system, one must be careful not to breed child mercenaries who nickel and dime at the smallest requests from their parents. Some basic responsibility at home must be expected, and should not have to be paid for by parents.
We suggest blending the best practices of both the East and the West and recommend a hybrid allowance model.
We recommend that children should be given a fixed allowance enough to cover their daily expenses at school. For additional cash to buy the cute eraser at the school bookshop or the newest toy they want, encourage them to find creative ways to earn the extra allowance instead. Perhaps they could suggest ways to help out around the house with tasks you might have previously paid someone else to do? Could they help their neighbours pull out weeds in the garden? Or seek out mini entrepreneurial projects?
Allowances are an excellent channel to align your family’s money values with the development of your child’s sense of the value of money.
Do you agree with our article on allowance for kids? Have you tried any creative allowance for kids methods that worked surprisingly well?