Mom Can I Have That?

"Can I have an allowance?"

You're tempted to say:
"You don't need one. We already give you all the money you need."

Dr. T's Rx:

If you think that by denying your kids an allowance you'll be able to limit the amount of money they get their hands on, forget it. Studies show that kids who don't get allowances have access to about as much money as kids who do.

Since they're apparently going to get the money anyway, it's better to have them learn to manage it themselves than nickel and dime you to death. With an allowance, both of you will actually have more control over your children's finances--especially if you make it clear to the kids that the allowance isn't bonus cash, but will take the place of money you normally would have spent on such things as comic books, baseball cards, art supplies, hair bows, or other kid-related expenses.

You don't need to give an allowance until your children are at least 6 years old. (Dr. T's first rule for a foolproof allowance system is not to start too soon.) You don't want to rush things, and preschoolers generally don't understand the abstract idea of money anyway. Given a choice between a nickel and a dime, they'll almost invariably choose the nickel because it's bigger, even though the dime is worth more.

Once children start first grade they begin learning about money in school, so they'll know that if you give them a $1 bill each week, that's equivalent in value to ten dimes or four quarters. They'll also have some idea of how much their dollar will buy. If your child is 9, 10 or even older and you don't already give an allowance, it's not too late. Some parents have even started their kids on an allowance when they became teenagers as a rite of passage to becoming more grown up.

How much should you give? Dr. T thinks first-graders need at least $1 a week to do any serious spending or saving. As children get older you can adjust that amount upward depending on how much of their own expenses you expect them to cover. One family decided to put their 12-year-old son and 10-year-old daughter on monthly allowances of $50 and $40 respectively--which sounds like a lot until you consider that out of that money the kids were expected to buy birthday gifts for friends, pay for their own movie tickets and other entertainment, and still set aside money for savings and charity.

Giving kids a weekly allowance that's equal to their age is another option, but that tends to overcompensate younger children. And it's too rich for most parents, judging from the figures on average weekly allowances nationwide, based on a recent survey by Youth Monitor, a syndicated service of Nickelodeon and Yankelovich Clancy Shulman. For 6- to 8-year-olds, the average is around $3; for 9- to 11-year-olds, about $5; for 12- and 13-year-olds, around $7; for 14- and 15-year-olds, about $9, and for 16- and 17-year-olds, around $11.

Dr. Tightwad Explains...