Allowance/Investments for Young Child
I have a 9 year old child and am wondering when we should start giving her an allowance. Should it be tied to doing chores? Should we require her to save/spend/donate it? How much is appropriate? There are so many opinions on this that I am overwhelmed. Any advice or resources you could recommend would be greatly appreciated. Thank you!
Terry Says
The toughest thing about an allowance is making a plan and sticking to it! I think a 9 year old is certainly able to make decisions about saving and spending. But you need to make a “reasonable” set of payments for specific chores, or for a week of “star” behavior, however you want to define that.
I will give you two ideas to make this process easier. The first is the 4-chambered plastic piggy bank available at www.moneysavvy.com This traditional piggy bank has four chambers — for saving, investing, spending, and donating. If you gave your child a dollar a week for starters, and kept a stash of quarters, she could decide how to allocate her allowance. You’ll have to explain investing, and maybe that won’t be a top priority. But when she accumulates $10, you could open an account at www.stockpile.com to buy a few shares of a company she recognizes. Obviously, this process will take some time to develop.
But I have a second idea to help you through the process. It’s an app called iAllowance. It lets you set up chores, track progress, and reward your child either with money or stars. It’s a great learning tool and very motivating –for parents as well as children! Check it out!
