How Much Allowance Should Your Child Receive?

When I was 12, the same age as Little Elvis, my parents gave me $2.50 each week for an allowance.

According to GiveMe20.com, a website sponsored by a Credit Union Association, my old allowance has the equivalent buying power of $0.45 in today’s economy. I can’t think of anything my son would to buy or could buy for $0.45.

It’s not about the money

GiveMe20 also weighs in on how parents can decide what a fair rate should be.  They maintain, and this may be hard to swallow at first, that kids should be given $1 per year of age per week.

Your ten year-old should be earning $10 each week.  My twelve year-old should be earning $12 per week and so on.

At first, this figure seemed high to me, but as I thought about it and compared it to prices I see everyday in stores, it made more sense.

Why?  Because an allowance isn’t about the amount of money, it’s about the teaching children to manage it wisely.

But it’s hard to manage $0.45!

In my opinion, kids need the necessary funds to make managing their money worthwhile. For instance, if their weekly allowance is too high, they can afford everything they want there’s no need to manage it. Conversely, if it’s too low, they lose interest immediately because they lack any real buying power.

Now, I have only one child left to raise so the guideline amount isn’t a hardship.  But imagine that you have (and some of you do) four kids ages 6, 8, 13, and 15.  Quick math tells me that your weekly payroll is $42. That’s a average monthly obligation of $182.  That’s quite a bit of money no matter how you look at it.

Add to that Solo-Dads and Solo-Moms aren’t usually rolling in the green stuff anyway and you’ve got a real dilemma.

What’s a Solo-Parent to do?

How do you handle allowance for your kids? Are you under-paying or over-paying your kids based on the GiveMe20 guidelines?  Do you have different rates for different ages? What’s your rationale for allowing for expenses and teaching your kids about money management?

Please share your thoughts and questions with us!