Making Allowance Count: Mistakes Parents Make

“Back in my day, I got an allowance of (insert pitiful amount here), and then it increased to (slightly less pitiful amount here) and I felt rich.”

Ahh, the memories we parents share with our kids. (Remember: We’re the same folks who walked uphill to school both ways when we were young.)

Financial allowances are an important family topic because of the importance of money in our society. You know, the money that buys food, shelter, clothing and PlayStation 4 games.

The website MarketWatch references a study by the American Institute of Certified Public Accountants that says approximately 70 percent of parents give their kids an allowance, and the average amount is $67.80 a month.
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But whatever amount parents dole out, they should be aware of these common mistakes, according to MarketWatch:

• You’re obsessed with how much you’re giving the kids: Parents get hung up on the amount, but the figure matters less than the fact that an allowance is a chance to talk about money and how to manage it.
• You start giving the allowance too late: Roughly half of parents still aren’t paying by age 8 — and experts say that’s a mistake. One expert recommends doing it “as soon as they grasp the concept — around 5 years old or when they start kindergarten.” Another expert says “as soon as they can count money,” which is about age 4 or 5. This way, money — and an appreciation for things like saving it and what it is used for — become a part of their lives very early.
• You pay your differently to your daughter: While nearly two in three men say they got an allowance growing up, only about half of women say the same, and experts say they still sometimes see this approach. Experts agree that boys and girls should be treated equally.
• You disperse the money with no strings attached: You should make your kids save at least part of the allowance they’re given. The recommended amount: one-third each week.
• You tie all the money to chores: Most parents make their kids work for their allowance by doing an average of six hours of chores per week, according to the AICPA survey. But at least one expert disagrees, saying “kids should do chores and take on household responsibilities because they are part of the family, and being part of the family means contributing. They are not being paid to contribute — it is expected as part of their family role.” Another expert says that if you peg an allowance to chores, kids will simply stop doing them once they have enough money.