Whether or not to give kids an allowance, and how to do it right, can be a topic of hot debate among parents. “People differ strongly on this,” says Girl Scouts Developmental Psychologist Andrea Bastiani Archiblad. “Many parents tend to revert to whatever they had growing up—but denying your child an allowance just because you didn’t have one isn’t a great idea. You’re doing your girl a disservice if you wait until she can legally make money to learn how to manage finances.”
Getting an allowance, and then making financial decisions with the money she accumulates over time, will teach her about the difference between wants and needs, the rewards of saving, and yes, even the dangers of impulse spending. “If your girl puts away her allowance for two months to get a new game or toy she’s been wanting, she’ll appreciate it and value it even more than if it was just handed to her,” Dr. Bastiani Archibald notes. Talk to her about her options and help set the pattern of saving, spending, and sharing with a charitable cause. Using cash in front of her, rather than credit or debit cards, will also help her see how real money is exchanged, and help her understand the real value and potential of the money she has.
Dr. Bastiani Archibald advises to give children weekly allowance in relation to their age—50 cents or a dollar per year (so a 10 year old would either get $5 or $10 a week)—and that you don’t tie it to chores or other responsibilities at home. “Of course your daughter should have chores around the house, as they teach her responsibility and teamwork, but she shouldn’t be rewarded with money for doing them,” she says. “That kind of allowance structure could lead to a mindset where she expects rewards for doing just the bare minimum in life—not an attitude that will get her very far!”