I ran into a friend of mine at the local flea market recently. She is trying to do the right thing. She is giving her two kids a weekly allowance. Check. She's not tying it to chore AND giving them the opportunity to make extra money on the side with "over and above" chores. Check. She's having them set goals using their share jars. Check. But she's giving her 7-year-old two dollars a week.
Pfffft! The air went out of the balloon.
Kids need to get enough money to allow an allowance to work effectively. Giving them a paltry amount is going to frustrate them as they try to achieve goals for anything substantial. A 7-year-old should be getting six or seven dollars a week and, if you've started setting goals earlier, he can be saving up for items that are in the $50 - $100 range. Doing this on a two dollar allowance will be incredibly frustrating for a 7-year-old. Remember, you're trying to empower them and make the understand that money is simply a tool. We want to help them develop "positive" feelings toward money and to understand that it's something that they can control...not the other way around.
I was happy to hear when she decided to alter her allowance amount. Her 7-year-old is now getting six bucks a week and is saving for big Harry Potter lego set.
Note - this family is doing fine financially. I understand that many of us are hurting and if you're circumstances are such that you must give a smaller allowance, that is perfectly fine and understandable. It's more important to do something than nothing. If necessary, find an opportunity to discuss the amount and why it might be lower than you want to provide.
Good luck and please, please send me your stories as you try and help your kids become comfortable with money.
