Allowance

What do we do when our kids nag us to buy things that we know they don’t need? Set up an allowance. It is a great opportunity to give your kids the experience of managing their own money. It’s based on the same philosophy I use with my shows. I want kids to be interactive—to point and yell and participate because I believe that they learn better that way. Similarly, giving kids money in the form of allowance, enables them to learn about money—mistakes and all—by using small amounts of it. If they want something, they can save for it. They’ll learn how much money they need, including tax, and suddenly, it’s much harder for them to part with their savings. It’s not only a lesson in financial responsibility but in making good purchasing decisions. 

Here, a few tips on setting up allowance ground rules:

» Start giving an allowance around age six.

» You don’t necessarily have to tie an allowance to chores. An allowance should be more about financial literacy and responsibility than about chores. However, combining the two is a practical way to talk about a good work ethic.   

» Our rule of thumb now is to give our girls money that equals half their age. Three dollars a week for a six-year-old, five dollars for a ten-year-old. 

» Children should be allowed to use their allowance any way they want. But we do talk, as a family, about SSG (spend some, save some and give some to charity).

» Know that sometimes they will need you to chip in if they are saving for something big. When one of my girls wanted a new pair of jeans, we agreed to split the cost with her fifty-fifty. This seemed to be a nice compromise for us all.

Mother of two, Angela Santomero is the creator, writer and producer of children’s uber-hits Blue’s Clues and Super Why! Every month Angela offers her advice and observations on being a mom and an executive in children’s television while balancing and learning from both worlds.