Allowance Do's and Don't's

A regular allowance can help your kids learn the vital importance of saving. Here's what you need to know.

by Peter Jaksa, Ph.D.

• DO give the allowance on the same day of the week, every week.

• DON'T tell your child how to spend the allowance money. That defeats the purpose: teaching financial decision-making.

• DO base the amount of the allowance on the realistic spending needs of the child at that age.

• DON'T pay your child for cleaning her room, completing homework, and so on. Everyday chores should remain separate from an allowance.

• DO build your child's money confidence by praising good money-handling habits and decisions.

• DON'T tie the allowance to grades. Most children with ADD feel enough grade pressure as it is.

• DO provide opportunities for your child to earn extra money by doing jobs around the house.

• DON'T criticize poor spending decisions. Discuss them with your child, and let him deal with the consequences of his decisions.

• DO set a good example for your child through your own financial planning and responsible spending decisions.