GoBankingRates.com Releases the Latest Installment of Its Financial How-To Series: How Parents Wean Their Kids Off Allowance and Still Help Them Save

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Go Banking Rates expert staff writer interviews real parents and identifies the best strategies for weaning children from receiving a monthly allowance, while continuing to instill important money values and encouraging a money-saving mindset.

GoBankingRates.com

GoBankingRates.com

Giving an allowance can be one of the best ways to teach your child about how to be responsible and cautious with money.

Many parents believe that an allowance is a handout. By giving their kids chores around the house and paying them, it sets expectations, encourages maturity and teaches children how to earn money and develop a work ethic.

Anne Nicolai of Mexico said that her son Jonathan (who’d been saving his allowance money at a credit union since age 5!) agreed to switch from an allowance to paid chores at age 12. Nicolai said that she expected some select chores, like laundry, dishes or cleaning one’s room, for free, but paid her son for others.

“Anything I would have had to pay some outside service to do, such as mowing the lawn, shoveling snow, cleaning out the gutters, cleaning the pool, or fixing something around the house, those things I paid the going rate for,” she said. The mother and son had no difficulty making the change. “I think it was a good thing for my son to know that he had the power to affect his income and to watch his bank account grow,” she said.

“You can ‘hire’ your child to do these tasks so they are still earning extra income, but it is not something that is automatically paid each week,” Christy Whitman, author of the Enlightened Kid Program, told Go Banking Rates. She said compensation for household work should be simple for parent and child. “They have to complete the task and then get paid. It is not like if you make your bed every day and pick up your room you get X amount. Instead, ‘Do a job and get paid.’ This can help supplement the income for your child.”

So when should you stop giving your child an allowance? Leslie Tayne, attorney and financial consultant, says, “When your child is making a sufficient amount of money on his or her own to cover their expenses, it is time to try to wean them off allowance. Children learn to be more responsible with money that he or she earns than money that is given to them.”

Simply put, the teenage years are a good time for kids to transition from allowances to earning their own money through part-time or seasonal jobs.

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About Go Banking Rates

GoBankingRates.com a national website dedicated to connecting readers with the best interest rates on financial services nationwide, as well as informative personal finance content, news and tools.

GoBankingRates.com is a division of ConsumerTrack, Inc., an 8-year leader in online lead generation, performance-based marketing, and customer acquisition in the financial, insurance and credit sectors. The company’s portfolio of 1500 finance websites includes GoBankingRates.com, GoInsuranceRates.com, and GoFreeCredit.com. These sites receive more than 2 million visits each month.

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Jaime Catmull
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