Allowances play a crucial role in teaching children about financial responsibility, budgeting, and saving. Determining the right amount of money you should give your child is a challenge for many parents. In this post, we will explore various factors to consider when setting allowances and provide guidance on appropriate amounts for different age groups.
Pre-Schoolers (ages 3-5):
Pre-schoolers are just beginning to understand the concept of money. At these ages, parents should consider using money as a teaching tool rather than financial independence.
Think about giving your child 1 Riyal a week to introduce the concept of saving and spending. Encourage them to use their allowance for small purchases or saving towards something they desire.
Elementary School (ages 6-10):
Children in this age range can start grasping basic financial concepts and may have a clearer understanding of the value of money. Consider providing a slightly larger allowance, such as 2 – 5 Riyals per week, depending on your family’s financial circumstances. Encourage them to allocate their allowance into different categories, such as saving, spending, and giving Zakat. This helps develop budgeting skills.
Pre-Teens (ages 11-13):
As children transition into pre-teens, their financial needs and responsibilities grow. Consider providing them with an allowance of 10 – 20 Riyals a week, allowing them to manage more significant expenses like personal care items or occasional outings with friends. Encourage them to set savings goals for larger purchases, teaching them patience and delayed gratifications.
Teenagers (ages 14-17):
Teens are often faced with a wide variety of financial responsibilities and may require a more substantial allowance to convert personal expenses. Consider giving them an allowance between 20 – 50 Riyals per week. Of course, look at your family’s financial situation when deciding the allowance amount.
Encourage your teen to take on additional responsibilities, such as purchasing their own clothes, contributing to their phone bill, or buying big-ticket items. This prepares them for the financial independence they will soon face.
Young Adults (ages 18-25):
Once your child reaches adulthood, it is essential to transition from providing an allowance to fostering financial independence. We’d suggest you focus on helping your young adult to develop budgeting skills, manage expenses, and begin saving money.
Encourage them to apply for part-time jobs, internships, or other sources of income to support themselves while keeping in line with their life goals.
Final Thoughts:
In conclusion, setting appropriate allowances for your children depends on their age, financial needs, and your family’s circumstances. It’s important to remember that an allowance shouldn’t be only tied to chores or academic achievements, as they are an opportunity for children and teens to learn financial responsibility.
As your child grows, regularly adjust their allowance to align with their increasing responsibility and evolving financial knowledge. By providing guidance and promoting healthy money habits, you can help your child develop a solid foundation for lifelong good financial habits.