Terri attended a meeting of parents of grade school and high school students this past October. A common concern raised between the school and parents was the amount of money children carried to school. One parent narrated how her son lost $25.

This amount represented his weekly allowance. He could not remember where he left his wallet. All he was concerned about was the PC Game his classmate lent him. Never mind that he would starve for a whole week. To hell with money, this boy must have thought, so long as he had the PC Game he was dying to play.

The school advised the parents to limit the amount their children brought to school to $3 maximum on any given day. There was simply no need for them to be loaded with cash, especially kids at the lower grade levels.

The guidance counselor who helped facilitate the meeting went a step further and invited some parents to a private session.

Here are 4 tips on giving allowances to your child:

1. Allowances can be used to instill the positive values of hard work and thrift. Kids are naturally unaware of just how difficult it is to earn money, especially during this period of severe economic upheavals not just here in the Philippines, but all around the world. In an age where people are encouraged to acquire goods swiftly using credit card, it is no small wonder that children also develop this very materialistic and unhealthy belief that money grows on trees and that it is easy to acquire anything quickly.

2. Younger children should be encouraged to save a portion of their allowances in either a piggy bank or a bank account. A child should be taught how to save money at a very young age, ideally when they start going to preschool. They may not understand mathematics yet but the habit of saving money is something they would find very useful when they grow up as adults and start working and earning.

3. Allowances should never be used to manipulate children. It is unfortunate that some parents are domineering by nature and use money as a power tool.

4. Practice what you preach. Giving your child an allowance is the first step in teaching him or her fiscal responsibility. A child who sees adults squander money will, in all likelihood, grow up with very little respect for money.

There are no specific rules on how much to give your child. Each family’s resources vary greatly and what may be just right for some may be excessive for others. A good rule of thumb is to know your child’s real needs and try to provide an allowance that will help him or her satisfy those needs (and, ideally, some of their wants as well).

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