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Allowance for your kids: When and how should you do it?

Posted at 12:48 PM, Dec 30, 2019
and last updated 2019-12-30 18:17:42-05

JUPITER, Fla. — Allowance for your kids. When should you do it? How much do you give?

Your relatives may be giving your kids cash this holiday season, so experts say now is a good time to teach your kids about saving.

Sarah Weinstein and Eliza Intagliata, two mothers from Jupiter, are walking into the world of allowance with their older children.

"We are going to start at like $3 to $5 a week," said Intagliata, who said her 8 year old is helpful with the baby and around the house.

But there will be rules.

"Half of it has to go into a savings account," said Eliza Intagliata. "The other half she can spend however she wants."

Eric Cornell, a private wealth manager and a dad, said that's the way to do it.

With the holidays here and checks and cash coming in from relatives, he believes it is important to teach children they don't have to spend every dollar they make.

"You take half of it, let them go get what they want," said Cornell. "You take the other half and teach them to set it aside, and they deposit it into that bank account."

Cornell said the bank account should be set up once your child earns $100 in allowance.

"Take them out to the bank and open a bank account," said Cornell. "They make a deposit and get a statement. It shows them earning interest. Teaches them the value of getting an asset."

He believes allowance should be tied to chores and be proportional to age. Start with simple jobs around the house. Things like filling up a water bowl, taking out the trash and turning off lights.

"Build a habit of knowing you have to work for money," said Cornell. "It doesn't come for free, so giving them chores at an early age. 4, 6, 8 years old."

That's how Weinstein is doing it too.

"The harder the task, the more money and that way she can save up for some of the stuff she wants too instead of us just buying it," said Weinstein.

Experts believe the key is teaching money management at an early age.