In my last post I started discussing strategies parents can use when giving their children an allowance. The following are some additional tips and suggestions regarding allowances.
*Pay your child in cash. Paying in cash will help your child understand the abstract concept of money.
*Set financial responsibilities for your children and stick to it. For example, if your child has to buy his or her own video games, don't buy one for them "just because." And don't help them out buying one because they haven't saved enough yet. Make your child wait another few weeks until he/she has saved enough money for the purchase.
*Understand that children are learning money management. They shouldn't be forced to purchase basic necessities with their allowance. Use allowance for your child to buy the "extras."
*Set a standard pay day and stick to it. Remember, you're trying to teach real-life money management. Think of how angry you would be if your boss held your paycheck. In doing this, remember to keep in mind your own budget when planning the payday. Don't plan the allowance payday on days of the month you routinely are running low on extra cash.
*In addition to your child's normal chores and allowance, consider an "overtime pay" allowance. Create a list of non-urgent jobs your child can do. When he/she comes to you wanting more allowance, refer him/her to the list. It's a great way for your children to learn that doing extra work means we can earn extra money. Plus, it's a time-saver for the parents!