Allowances can be a tricky thing as your child gets older. On the one hand, giving them some money is a nice way to help them out and lets them focus on things like school and extracurricular activities instead of working all the time. On the other, just handing them cash can be a bit patronizing and does take some of the incentives out of getting a job altogether. It's a tough balancing act, but it's one you'll have to learn going forward. Here are four elementary tips for setting a teen's allowance that might help with that.
1. Needs and Responsibilities
A big part of how much money you should be giving your teen will depend on their needs and responsibilities in life. How many chores do they do at home? What are their grades like? How much of their personal expenses like food and clothes are they meant to be taking care of? The greater your answer here, the more they probably deserve and vice versa. It might also be worth considering their age and environment, as a necessity many parents overlook is fitting in with classmates as a child gets older, typically with some nice clothes or similar status piece (though it's obviously necessary to be cautious about giving into peer pressure and the like). Overall, it's best to think about it in terms of how much money is required for them to be secure and semi-independent without going overboard.
For many teens, allowance either stops or gets somewhat of a reduction once they find a job. This is for fairly obvious reasons, though you may not want to leave them high and dry immediately. For one, take their employment situation into account, particularly with regard to how much they're making and how many hours they put in. Going back to the point on needs, will their job be able to cover their necessary expenses on its own or are they still going to require your help? This question in particular is probably the most important, as the alternative would be to leave your child struggling to balance work and school just to get by without the allowance they'd previously relied upon.
What your teen intends to spend money on can also play a part in determining allowance. If they're just saving money to have some cash to spend, a larger allowance is probably not too necessary. If they're saving for a large purchase like a car or even to directly contribute to a college fund, you might be inclined to add a little extra to help them on their way. This can be a good way to subtly encourage responsible money management, too, incentivizing them to make good choices with the money they have rather than spend it recklessly. Essentially, if they notice they're making more by making good decisions, they're more likely to keep doing that.
4. Discuss The Issue
The simplest way to understand how to decide the amount for your teen’s allowance is to have an open conversation about it. Holding discussions about finances without the usual secrecy can be a good way to encourage responsibility as well as lead to good lessons about handling money overall. As for the more immediate issue, it also gets to the heart of the problem without any guesswork when you can just negotiate with your child for a fair amount. That's a lot less stress for all parties and ensures that your teen always has what they need.
Talking about money can be a challenge for many, but it's necessary for quite a few circumstances. Setting your teen’s allowance is one of those situations, so keep in mind these four tips for finding a fair amount to keep everyone happy while teaching a bit of financial discipline in the process.