Gift Allowance.
Parent: My 7 year old recently accepted an invitation to a friends birthday party. Should he be responsible in spending his allowance on a gift for his friend?
Kids' Money: When determining an allowance amount, the gift-buying needs of a child are difficult (if not impossible) to estimate. Who knows how many birthday parties he will be invited to? If you don't take those expenses into account when setting the amount, the allowance will not begin to be adequate to cover the cost of gifts.
Our solution is a separate Gift Allowance. You can set a dollar amount or a percentage of the gift cost or a percentage up to a certain dollar amount. You may want to have different amounts for family than for friends. For instance, you may provide half the cost of the gift for a maximum parental contribution of $5 for friends and $10 for family. Or, you may just want to provide the $5 or $10 and let the child make up the difference if he wants to spend more.
Either way, you've given your child an amount of money they can count on for buying gifts and also given them the opportunity to budget that amount, combined with whatever they may choose to add to it, in planning those purchases. Such a Gift Allowance can be both a convenience for parents and a valuable learning experience for children.
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Money management software for kids.
Parent: I have been searching for a Windows compatible program to assist my daughter in tracking and budgeting her allowance. Something like MS Money or Quicken for kids. Thanks for any help.
Kids' Money: We've been searching too and have yet to find anything. Since your daughter will not have to balance a checkbook a simple spreadsheet may be an adequate short-term solution. Label the columns with "Date," "From/For," "Amount," and "Balance" and let her enter and track her own income and expenditures.
Shortly after we publish the Kids' Money Journal, we hope to be able to offer a software version that should satisfy this need.
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How Much Allowance...5 Chores A Day?
Parent: How much should I give a child for doing 5 chores a day?
Kids' Money: If you choose to base the allowance on chores, the amount should be determined by the difficulty of the jobs, the time required to complete them and the age of the child. For younger children, the decision is based primarily on age. As kids get older, these chores can become much bigger jobs and the nature of the chore becomes more of a factor in determining the amount.
How about other Kids' Money parents? Now's the chance to share your knowledge and experience in this area. E-mail your views now!
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How Much Allowance...Responsibilities...
Parent: I don't know how much allowance I should give them and what responsibilities to give them with the allowance.
Kids' Money: Make a list of the things they will be expected to pay for. Total the amount required and make that their allowance. Don't tie any responsibilities to the allowance. Require them to do basic chores just because they are a responsible member of the family. Pay them separately for any work done beyond what's expected on a day-to-day basis.
Parent Response: Those that think they are doing their children a favor by not having their children earn their allowances are making a very bad mistake. Because the children develop a bad attitude on money. Namely that they think life's a give away program and all they have to do is make demands for money. On the other hand... By saving 50% for future needs, 10% to charity or church and 40% that has no strings attached as to how it gets spent, it readies children for the real world.
How about other Kids' Money parents? Now's the chance to share your knowledge and experience in this area. E-mail your views now!
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Remembering To Pay Allowance
Parent: I forget to give them their allowance many times and it irritates me when they ask for it. It seems like their is no gracious way of asking for your allowance. As a consequence they stopped asking, and many times, I have forgotten to give it.
Kids' Money: The easiest way to keep up with allowances, and even expenditures for that matter, is a journal system. On the same day each week, enter the allowance. If you miss a week, you will have a written record of it.
Every time your kids have you pay for something they are buying with their own money, have them deduct it from the journal. You can eliminate the problems of "I'll pay you when we get home," or "Do you have change for a twenty?" after you get home.
Payment for extra jobs around the house, as well as checks for gifts, can also be managed through the journal.
Parent Response: Our kids get "paid" when I get paid - every other Friday. We have a chore chart with jobs to do and a value assigned. On "payday" the check marks are added up and the money is given out.
How about other Kids' Money parents? Now's the chance to share your knowledge and experience in this area. E-mail your views now!
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