4 minute read
What you need to know about allowances
Whether parents are just planning to set up allowances, need to do a little fine-tuning, or want to see what works for other parents, get a head start on your research courtesy of the Family Money team.
If you are ready to set up chores and still have questions about allowances—here are a few tips.
Essential Allowances Strategies
Pay children regularly
It helps children learn to plan ahead and make a realistic budget to which they can really commit. Receiving a regular allowance allows children to get hands-on experience when it comes to saving, spending, and managing money.
Families can use allowances to reinforce values. Many parents set amounts to be used for different reasons such as giving to a favorite charity or perhaps longer term goals like saving for college or a car.
If parents expect their child to pay for certain expenses, that expectation should be clear. Be sure to discuss these responsibilities thoroughly so there are no questions later. Kids will be kids and their budgets may boom and bust. Their financial errors can be used as an opportunity to discuss what happened, how to avoid it in the future, and come up with a solution to fix the situation now.
One of the most important things kids need to learn about money is that once the money is spent – it’s gone,
How do I set up a regular allowance?
Family Money allows you to automate allowances. To set up your child’s allowance, just follow these simple steps in the app:
- Navigate to the Transfer screen and tap - or + to set up the amount
- Select the allowance amount by using the keyboard
- Choose your child’s profile and select either Vault or Spend Card
- Next, turn on Repeat for a recurring allowance and pick either Weekly or Monthly
- Now tap Save, Next, and Again to confirm
In the app, upcoming payments are listed under Scheduled. Parents will receive a reminder 2-3 days prior to when your child’s allowance is due and will receive an alert if there is not enough money in your Wallet to cover the allowance.
Positively Reinforce Good Behavior
It is also easy to add money from your Wallet to your kid's Vault or Spend Card as an extra bonus or a reward for a job well done.
- Just open the app and navigate to the Transfer screen
- Next tap - or + to step up the amount or select the correct amount by using the keyboard
- Select the kid's profile and tap either Vault or Spend Card
- Select Next and then Confirm
Doing routine chores as part of the family can definitely be an expectation and Family Money helps you with that too. Take advantage of automatic allowances–and assign kids chores. Family Money makes it easy to keep track of their work.You may choose to pay for some extra chores (things you would normally pay someone outside the family). Offering opportunities to earn extra money, reinforces the child’s potential to earn. Not being able to purchase a pair of designer jeans because the money was spent on a new video game is a powerful lesson in financial consequences.
Family Money helps enforce those guidelines in many ways:
- It can’t be used at certain types of stores for adult purchases
- Parents can see every transaction (stores, amounts, and times)
- Spending is tracked by store and category (like food and entertainment) based on merchant codes
- Parents can lock the card if they don’t like how the card is being used or the purchases don’t align with family values
How much should I pay them?
Setting allowances depends on the individual family, expectations on what needs to be done to earn money, and what kids need to buy.
Some parents select allowances based on kids’ ages. Others may be more specific, such as $1 for each year of a child’s age per week (a 10-year-old would get $10 a week). Others may just approximate an allowance, based on age, how many, and what kind of chores the child is expected to complete. It is a great opportunity to discuss with your child how they plan to spend their allowance.