How Much Should You Give Your Child for an Allowance

Student credit card loans and education loans have become a major cause of concern for parents, these days. If you want to stay away from such a situation, it will be wise for you to help your child develop good monetary habits. In most of the cases, children gain the habit of making uncalculated expenses as they get allowances in excess.

There is nothing wrong in giving pocket money to your child but you should decide the sum of money or the amount carefully and then make the decision. Parents who are unable to decide on the amount of pocket money that they will be giving to their child can take note of the following factors.

Determine the Needs of Your Child

Traveling Allowance:

When you are deciding on the allowances that you provide to your child, you should at first chalk out the needs of your child. Make an estimate of the transportation cost that is needed for going to school.

If your child is enrolled in any other activity like music, dance, swimming or even in any games, you should not forget to include the transportation cost for travelling all the way to the respective training centers. Most of the children have their own bikes or cycles. In that case, allowances for transportation should be reduced.

Food Allowance:

It is always good to pack the lunch box of your child when he leaves for school. However, many working mothers cannot do so for their busy schedules. Whatever be the reason, if your child is not carrying his lunch from home, you should estimate the cost of foods in the school canteen or college canteen and then add up the amount to determine the total allowance in this account.

Miscellaneous Allowances

It is good to give some extra money to your child for purchasing some items of his choice or for a movie with friends. However, that should be restricted and decisions should be made depending on the age of your child.

Make Your Child Develop the Habit of Saving Money

Irrespective of the sum of money that you are offering to your child as his allowance, you should encourage him to save a part of it. Initially he may not be interested to save much but with due course of time, he will gain the habit of saving money. You can start with a piggy bank and then can gradually proceed to open up a bank account for your child. Also make him understand the value for money so that he can decide how to make the best use of every penny he receives.

These tips should help give you a better idea of how much to give your child for an allowance. You definitely want to give them enough to learn to manage their money. However, you don't want to give them too much money since this will give them unrealistic expectations in the future.