Most financial experts agree that children should be given an allowance, as it teaches money management skills very effectively…but how much should be given? And when should you start? Bankrate says:
The problem is that most parents resist giving children an allowance and, if they do, they usually give the children too little. If the allowance isn’t large enough for children to experiment with — to make mistakes with — it won’t have the learning effect you’d like it to have.
As soon as your child begins to express a sincere interest in material wants (as in, “I want that!”), it’s time for an allowance. Depending upon the child, that’s probably around the ages of 3 to 5.
The first mistake most parents make is starting too late. The majority of parents wait until their children are tweens (9 to 12 years old) and they miss out on the opportunity to discuss money with young children who are more apt to listen to, and take, their parent’s advice.
Bankrate suggests that you determine how large an allowance to give by the expenses the child is expected to pay for (lunches, movie tickets, school supplies, whatever.) That way, if the child doesn’t budget well enough, he or she will not have enough money left over for the weekend. If the sum is too small or too large, the lesson won’t be there. Ahh, learning. —MEGHANN MARCO
All About Your Child’s Allowance [Bankrate]