THIS IS AN ISSUE that can prompt heated arguments among parents. Some insist that their children do chores in return for their allowance and that, once they’re teenagers, they should earn their spending money by babysitting, cutting grass or getting a job at the local ice cream parlor. Others believe that pocket money shouldn’t be tied to doing chores—because the latter is integral to being part of the family—and that forcing teenagers to take menial jobs gives them an uninspiring view of the work world and takes away from their far more important goal, which is getting good grades.
How should children use their allowance? Some parents apply the “spend, save, share” concept. With every week’s pocket money, children are allowed to spend part of their allowance, but they are also expected to save toward a future purchase and give part to charity. Whatever rules you lay down, this is a great chance to talk to your children each week about money and help boost their financial savvy.
How much pocket money should you give? One rule of thumb says children should get a dollar a week for every birthday they’ve had, so a seven-year-old would receive $7 every week. Arguably, the dollar amount should be tied less to age and more to the financial responsibility that comes with it. For instance, if your teenagers are expected to buy their own clothes, you might need to give a 13-year-old more than $13 a week.
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