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Allowance Q & A

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Gift Allowance.

Parent: My 7 year old recently accepted an invitation to a friends birthday party. Should he be responsible in spending his allowance on a gift for his friend?

Kids' Money: When determining an allowance amount, the gift-buying needs of a child are difficult (if not impossible) to estimate. Who knows how many birthday parties he will be invited to? If you don't take those expenses into account when setting the amount, the allowance will not begin to be adequate to cover the cost of gifts.

Our solution is a separate Gift Allowance. You can set a dollar amount or a percentage of the gift cost or a percentage up to a certain dollar amount. You may want to have different amounts for family than for friends. For instance, you may provide half the cost of the gift for a maximum parental contribution of $5 for friends and $10 for family. Or, you may just want to provide the $5 or $10 and let the child make up the difference if he wants to spend more.

Either way, you've given your child an amount of money they can count on for buying gifts and also given them the opportunity to budget that amount, combined with whatever they may choose to add to it, in planning those purchases. Such a Gift Allowance can be both a convenience for parents and a valuable learning experience for children.


Child's Checkbook.

Parent: I once saw a child's "checkbook" in a mail order catalog that would allow the parents to "bank" allowance for the child that the child could write checks against, thereby teaching the child the principle of checkbook balancing, etc. Do you know where I can get a child's checkbook?

Kids' Money: You're looking for the Checkbook for Kids by ParentBanc. You can find it in the Learning Activities section of Kids' Money Store.


Allowance kit.

Parent: Where can I buy an Allowance Kit?

Kids' Money: Check out the World of Money Allowance Kit in the Learning Activities section of Kids' Money Store.


Looking for sample Journal sheets.

Parent: I've browsed through the Kid's Money site and I still can't find sample journal sheets for managing kid's allowance money. Your mention a book that will be available - is this out yet?

I also am encouraging my kids to create savings categories based on bank savings, Christmas savings (for x-mas shopping), savings for a special large purchase they want (a Parrot), giving to charity and regular spending money.

Please let me know where I can find a simple system to help them track their savings and spending.

Kids' Money: Check out the sample Journal sheets below. The book is still in the works. You may be interested in other systems offered in the Learning Activities section of the Kids' Money Store.


Book to help kids track their money.

Parent: Can't find your Q&A which contained the name of a Kiplinger forthcoming book about kids keeping track of their money...Help

Kids' Money: Haven't heard of any Kiplinger book. Kids' Money should have a system of our own out by year-end. Check back with us in a couple months for all the details.


Sample Journal sheets.

Parent: Please create a sample sheet I can use for my children with the three areas...saving, sharing, spending with an area for examples. I read all these wonderful ideas, but I am having a hard time visualizing how this sheet or "book" would look like.

Kids' Money: Once our Kids' Money Journal is published, it will be as simple as going to your local bookstore. In the meantime, maybe the following will get you started:

  • Find a Cash Journal at your local discount store.
  • Divide it into three sections and label them savings, sharing and spending.
  • Head the columns | Date | From/For | By | Amount | Balance |.
  • Use one line for each transaction.
  • Have your child enter the date, where the money came from or went to, the amount and the balance.
  • Review and initial each entry.
  • A typical entry would look like | 6/2/96 | Allowance | DBM | $7.00 | $10.50 |.
If this still seems unclear and if you can wait, check back for more information on the Kids' Money Journal.


Money management software for kids.

Parent: I have been searching for a Windows compatible program to assist my daughter in tracking and budgeting her allowance. Something like MS Money or Quicken for kids. Thanks for any help.

Kids' Money: We've been searching too and have yet to find anything. Since your daughter will not have to balance a checkbook a simple spreadsheet may be an adequate short-term solution. Label the columns with "Date," "From/For," "Amount," and "Balance" and let her enter and track her own income and expenditures.

Shortly after we publish the Kids' Money Journal, we hope to be able to offer a software version that should satisfy this need.


How Much Allowance...11 year old?

Kid: My name is Tim and me and my mom are trying to figure out what my allowance should be. What do you think? My Age: 11; Grade: 6; Sex: M. I get paid weekly.

Kids' Money: Check all this out:

How about other Kids' Money parents? Now's the chance to share your knowledge and experience in this area. E-mail your views now!


How Much Allowance...13 year old?

Parent: I have a 13 year old son. How much allowance should I give him?

Kids' Money: To come up with the amount, ask yourself:

  • What personal expenses do I expect my child to pay for? Are clothes included?
  • Do I expect him to pay for all or a portion of gifts to friends and family? How much would that be?
  • Do I expect him to save a certain amount? How much would that be?
  • Add up these amounts.
  • How much of this total can he be expected to earn from outside sources (lawn cutting, etc.)?
  • How much can I afford to pay?
Add up his needs, subtract his earnings and see if that amount is affordable.

It may be helpful to keep in mine:

  • The purpose of an allowance is to give your son an opportunity to learn how to manage his own money.
  • For most parents, the amount of the allowance is the same as or even less than the amount of money that you would have otherwise given the child for personal expenditures and gifts to friends and family.

How about other Kids' Money parents? Now's the chance to share your knowledge and experience in this area. E-mail your views now!


How Much Allowance...5 Chores A Day?

Parent: How much should I give a child for doing 5 chores a day?

Kids' Money: If you choose to base the allowance on chores, the amount should be determined by the difficulty of the jobs, the time required to complete them and the age of the child. For younger children, the decision is based primarily on age. As kids get older, these chores can become much bigger jobs and the nature of the chore becomes more of a factor in determining the amount.

How about other Kids' Money parents? Now's the chance to share your knowledge and experience in this area. E-mail your views now!


How Much Allowance...Responsibilities...

Parent: I don't know how much allowance I should give them and what responsibilities to give them with the allowance.

Kids' Money: Make a list of the things they will be expected to pay for. Total the amount required and make that their allowance. Don't tie any responsibilities to the allowance. Require them to do basic chores just because they are a responsible member of the family. Pay them separately for any work done beyond what's expected on a day-to-day basis.

Parent Response: Those that think they are doing their children a favor by not having their children earn their allowances are making a very bad mistake. Because the children develop a bad attitude on money. Namely that they think life's a give away program and all they have to do is make demands for money. On the other hand... By saving 50% for future needs, 10% to charity or church and 40% that has no strings attached as to how it gets spent, it readies children for the real world.

How about other Kids' Money parents? Now's the chance to share your knowledge and experience in this area. E-mail your views now!


Remembering To Pay Allowance

Parent: I forget to give them their allowance many times and it irritates me when they ask for it. It seems like their is no gracious way of asking for your allowance. As a consequence they stopped asking, and many times, I have forgotten to give it.

Kids' Money: The easiest way to keep up with allowances, and even expenditures for that matter, is a journal system. On the same day each week, enter the allowance. If you miss a week, you will have a written record of it.

Every time your kids have you pay for something they are buying with their own money, have them deduct it from the journal. You can eliminate the problems of "I'll pay you when we get home," or "Do you have change for a twenty?" after you get home.

Payment for extra jobs around the house, as well as checks for gifts, can also be managed through the journal.

Parent Response: Our kids get "paid" when I get paid - every other Friday. We have a chore chart with jobs to do and a value assigned. On "payday" the check marks are added up and the money is given out.

How about other Kids' Money parents? Now's the chance to share your knowledge and experience in this area. E-mail your views now!

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Kids' Money > Parents > Allowances > Q & A

Allowance Magic: Turn Your Kids Into Money Wizards by David McCurrach


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