When Should a Child Get an Allowance?
Is it time to give your child some pocket money? Is it all right to let your child take financial responsibility this early? And how do you deal with seemingly irrational expenses such as when your child spent all the money on lunch and snacks?
At 4 or 5 years old it’s already good to give your child some allowance he/she can use to buy stuff. It’s the age range when kids start to demand and display independence and control. If your child already has money of his/her own, he/she can practice independence and even develop his/her self-confidence.
Aside from encouraging your child to make his/her own decisions regarding money, the allowance or pocket money will teach him/her the value of money and how to manage it properly. This is much better than abstractly explaining the value of money and how to spend it wisely. Instead, you give him/her the tools and resources and let your child learn through his/her actions and the consequences he/she receives.
For instance, your child can instantly learn the consequences of overspending. What happens if your child spent all his/her money on snacks and lunch? Your child will realise (with your guidance) that he/she will have nothing left for anything else. He/she won’t have any money to buy the things he/she truly wants. In addition, your child won’t have money saved for future expenses or for bigger purchases such as buying a gift or a special toy.
When should a child get an allowance?
It’s always good to start early so that you immediately help your child get in a strong foundation. This applies to handling money even if it’s all just small purchases and small savings. After all, it’s not about the amounts but on the habit and behaviour. If your child has learned early on how to manage small things, expect him/her to be more ready to manage bigger things and deal with bigger amounts of money as he/she grows.