Allowance for Young Children
Hello, We have a son who will turn 5 in September and a daughter who will turn 3 in December. A year ago we said we would start giving our then 4 year old son a weekly allowance. We were slow, then Covid quarantine started and we just don't go out much so we dropped the ball on it. I'm thinking of starting his allowance now that he'll turn 5.
Wondering at what age other families started giving allowances, how much they give and if there's any 'strings attached' chores/work the child has to do or just a straight forward allowance. And wondering families have the child split it for giving/savings/spending?
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And since I gather we will start with a very small amount, wondering if easiest to keep it within the 'kids' category rather than a 'cash account'? Or how families handle small allowances within YNAB?
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Yes, I'd just made a budget category for their allowances.
I'm not a parent but while I was growing up I got a weekly allowance and was required to put 1/3 of it in savings. I was told it wasn't for specific chores, but I was expected to do as I was told in general. Personally, if I were a parent I'd have them put a certain percentage of the allowance in some sort of fund (obviously owned by the adult) to show how investing and compound interest grows money over time.
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Tomato Tape do you have any examples, like an education savings? I will look into this idea, good one, thank you.
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Hi there, I had done a post on this previously which I am linking below. Hopefully it is helpful.
We have kids categories (even as adults). That is where we put the allowance. I made it a scheduled transaction to help with funding. We also used these categories to help track expenses that were shared with the other parents. (divorced)
The books recommend not tying the allowance to chores because each child should be expected to pull their fair share without expectation of compensation. If they do extra chores, then you could choose to fund it. It can set up some crazy dynamics by tying them together. For example, if you cannot pay them, can they stop doing the chores?
I liked the book series because it took a long approach and had great ideas for transitioning to the teens and post-secondary schooling. Like I said, I came to it later but it has some great ideas.
https://support.youneedabudget.com/t/y4hx8aj/kids-and-money-book-series-resource
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The money is leaving your budget, which is an expense. Budget for it and record the outflow when you give them the cash. (It doesn't stay in the "kids" category.) I think 5 is a good age.
