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How Much Money Should a Teenager Get for an Allowance?

by Mark Applegate

In a culture in which many are thoroughly drowning in debt or feeling entitled to a solid living, parents must be proactive in teaching teens the value of money and an honest day's work. Parents and their kids have debated the allowance dilemma for generations. Striking the right balance of the allowance amount compared to the chores your teen completes and how much he needs can be a big challenge.

Tie Allowance to a Budget

Your teen must not only learn to manage an allowance, she must learn how to budget her allowance once she receives it. Work with your teen to calculate her total monthly expenditures when discerning an allowance amount. Include essentials, such as clothing and transportation, as well as perks, such as phone expenses, entertainment and a small amount of off-budget funds. Consider what you can reasonably afford with these figures in mind, then decide what the periodic allowance will be. Give the exact amount on the same day of the week or month on a regular basis.

Teach Your Teen Stewardship

Early in his high school years, provide a smaller percentage of his allowance budget early in the month, then pay the rest out of your budget. For instance, give him 25 percent of his budgeted expenses, then make him pay that portion of the budget or make cutbacks. As he becomes an upperclassman, give him half or more of this budget with the same expectation of shared responsibility. By the time he is a senior, give him all of his budgeted amount in advance. This will teach budgeting and prioritizing expenses, frugal living and saving for large purchases. Do not merely cave in and add to the agreed upon budget without a deduction from the next month.

Like a Paycheck

Tie your teen's allowance amount to a defined set of work expectations. While your teen should already expect to do household chores without financial reward, adding an allowance to it gives her the feel of earning a paycheck. If your teen needs more money and does not have time to earn it over time at the agreed-upon amount, offer her additional chores to work overtime so she can make the purchase, or offer an interest-bearing loan to cover it at a market rate of interest. This will prepare her for adulthood and will help her prioritize her expenditures.

Other Considerations

Weigh letting your teen get a job while in school with the impact it may have on his grades and potential academic scholarships. You may be able to use an allowance to supplement his total budgeted amount while allowing him to work less outside of the home and still cover his budgeted expenses. As your teen gets older, integrate more expenses into the budgeted allowance amount, such as car insurance and school expenses, then have him pay the added amount himself.

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