Ask the money expert, featuring Kay Gandham from Envision Financial’s Willoughby branch, a division of First West Credit Union

The subject of giving kids an allowance is a sensitive one with most parents – most people have an opinion about it - either about how much or on what basis it’s given. Or, even to give an allowance at all.

Dos and don’ts of using an allowance to build your kids’ money skills

The subject of giving kids an allowance is a sensitive one with most parents – most people have an opinion about it – either about how much or on what basis it’s given. Or, even to give an allowance at all. Here are some tips to consider when deciding on whether to give or not give an allowance:

  • Don’t make it too much: whether you tie allowance to chores or a figure based on age, make the amount reasonable to help teach your child the value of money. If you compensate too much for too little, you may not be teaching the lesson that earning money takes a lot of effort and time.
  • Don’t pay in advance: unless it’s a repayable loan: encourage your child to save for goals instead of giving them an advance on their allowance. This provides an opportunity to have a discussion about saving and the time required to save up for something they really want.
  • Encourage entrepreneurial behaviour: encourage your kids to think of creative ways to earn money. Things like paper routes, dog walking or lawn-mowing will teach kids that the more work they do, the more they will earn. It also teaches them to promote themselves and their skills to others – an invaluable life lesson.

 

 

 

 

close