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Paying Preschoolers?
Determining If Your Child Should Receive an Allowance
By Allen Martin
When asked if a preschooler should receive an allowance, I always answer yes! For many parents, the idea of giving a preschooler money is debated. Some feel that it is a pure waste of money, as a child has no sense of value or marketplace experience. Others claim it is never too early to teach your child about money.
I side with the latter – with one disclaimer. If you give a child money, then it must come with explanation and instruction. Capitalize on the teachable moment.
1. Children, even very young children, have a sense of value – at least an intrinsic value that they can exchange money for goods in the marketplace. Certainly young children can feel a sense of deprivation from the lack of money.
2. At a young age, money should be used as a teaching tool. You can teach a young child to count with money. You can teach the concept of tolls, taxes and tipping. Taking a child to a bank and opening savings accounts can create an excuse for a great family outing.
3. Delayed gratification can be taught by having the child save a portion of each allowance for the purchase of a desired toy in the future.
As for the amount, many experts agree that $1 per year of age per week is appropriate. I believe that a 4-year-old can get by on less. I would start out with $2 – a one-dollar bill and change. Let the child feel the difference and slowly introduce them to the concept of relative amounts.