Getting an allowance is an exciting rite of passage. It provides a whole new world of responsibility and independence as your child learns basic money management skills, like budgeting and saving, that can help throughout life.

Allowance Tips

• Give an allowance that’s appropriate for your child’s age. Many parents base the amount on the "going rate" in their community. Ask other parents how much they give their kids. Give within your own comfort zone and be consistent.
• Set clear expectations. Do you expect your child to pay for certain expenses? If so, which ones? Be sure to articulate these responsibilities clearly so there are no questions later.
• As your children age, change the allowance accordingly. For example, when they’re younger, limit the payment time frame, keep the amount small, and begin to set expectations for how they earn an allowance and pay for expenses. As your kids get older, say 14-18 years old, use the allowance to reflect the real world. Pay your children every two weeks, or even monthly. Have them create a budget. Increase the amount you give them, but also increase their responsibilities.
• Let them learn from mistakes. Children will be children, and that’s OK. Expect yours to do some unexpected things with their money—and to make some unwise decisions.
• Support them, but don’t rescue them. If your children make a financial error, don’t rescue them with more money. Help them work through the situation and arrive at a solution.

Allow your kids to learn. Remember: the purpose of an allowance is to let your children learn how to manage money firsthand, through their own successes and failures.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of savings and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction or strategy for his or her own particular situation. The examples mentioned are for informational purposes only and are not intended to represent results you should expect in the future. Data contained herein is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.