Skip Ribbon Commands
Skip to main content

Family Life

Using an Allowance to Teach the Value of Money

About three in five teenagers receive an allowance. If your boy or girl isn’t among them, consider the benefits. An allowance shouldn’t be viewed as a reward but as an opportunity to teach youngsters financial responsibility. It also helps them learn to prioritize (If I want to buy that pair of boots I’ve been saving up for, I really can’t afford these earrings) and to weigh their options carefully before making choices (On second thought, I like the earrings, but I don’t like-like them. Forget it: I’ll wait until I have enough money for the boots).

As with acquiring any skill, mistakes are part of the learning process. Isn’t it preferable for a child to mishandle money when the sums and consequences are minimal, as opposed to when he’s an adult and possibly flush with credit cards?

There are two schools of thought on whether or not a teenager’s allowance should be contingent upon his performing chores at home. Those who oppose the practice say that it sends the wrong message; before long parents could wind up with a sixteen-year-old who drives a hard bargain every time he’s asked to put out the garbage. Household tasks are done because every member is expected to contribute to family life. Period. What does he receive in return? Praise and a hug. If allowance is not to be a reward for a job well done, a youngster who is negligent should have a privilege rescinded, not his allowance.

The opposite view is that money is no less compelling a motivator for adolescents than it is for adults, and that an allowance is essentially a child’s first paycheck. She should know that if she doesn’t carry out her responsibilities, part or all of her allowance will be docked.

How Much Allowance?

There are several ways to determine the amount of a teenager’s allowance. Some parents simply match what other kids in the neighborhood are getting. Others estimate how much money they currently spend on clothes, school supplies, after-school snacks, CDs, videos, going to the movies and other typical teenage expenses and then give all or a portion of that amount directly to the child. Whether you think that is a viable approach will most likely depend on how responsible your teenager is, not to mention your financial situation. Expect to tinker with this system until you hit upon the magic figure that covers your child’s expenses without spoiling him.

Some Guidelines to Help You

  • Pay children their allowance on the same day every week. Consistency is important, so that they can practice budgeting their dollars until next payday.
  • Try not to interfere with a teenager’s money decisions, even if you disapprove. However, feel free to give advice on how to be a savvy consumer. For instance, if your daughter has her heart set on a leather bomber jacket, take her to several stores and point out the differences in price and quality.
  • What if your child runs through his allowance too quickly and asks for an advance on next week’s payment? Sorry, the bank is presently closed. To lend him money would only foster the buy-now, pay-later spending philosophy that has landed many adults in financial hot oil. No: He must learn to ration his money more conscientiously. A firm position is the proper and loving course. 
  • Allow your teenager to earn extra money by performing additional chores, especially if she’s looking to put away money for a pricey item, like a new bicycle. What a terrific lesson in the value of delayed gratification. As for the earlier statement about not linking allowance to chores, this is different. Temporarily think of her as an independent contractor.

 

Last Updated
5/11/2013
Source
Caring for Your Teenager (Copyright © 2003 American Academy of Pediatrics)
The information contained on this Web site should not be used as a substitute for the medical care and advice of your pediatrician. There may be variations in treatment that your pediatrician may recommend based on individual facts and circumstances.