An allowance can teach a child many valuable lessons. But money can be a mixed blessing, so it's important to settle on an appropriate amount before doling out dollars. Consider the following factors when giving your child an allowance.
The Child's Age.In a poll conducted by BabyCenter, the most common age for starting an allowance was 4 years old. Some children that young may show an interest in putting money in a piggybank and counting it up until there's enough to buy what they want. But if they don't understand the concept of saving their own money to buy something in particular, they may not be ready. With some kids, 9 or 10 may be the appropriate age.
No matter when you start, increase the weekly amount as the child grows older. One recommendation is to calculate 50 cents per year, meaning a 6-year-old would receive $3 a week. Choosing a formula like this can eliminate confusion about how much to give, and siblings can't argue about getting more or less.
Your Family Income.Of course, what suits one family may not suit yours. Try working your children's allowance into your monthly budget to assess whether the sum is realistic. As your kids get older, include them in the discussion about how much they will receive. For example, if you hit a rough patch because you run into an unexpected expense, be honest with them about it and explain how and why it will affect their allowance that week.
An allowance also need not be handed out weekly. If your family relies heavily on a commission-based job, for example, or your income changes month to month, try giving your child an allowance once a month, or in whatever frequency makes sense for your financial situation.