Posted by admin on May 1st, 2009 in Jobs/Careers, Money, Parenting

The amount may be higher or lower, depending on the parent’s income and the family’s overall budget.   Obviously, if your budget is closer to  Bill Gates, the allowance you  give  your child will be  higher than for the rest of us.  An interesting survey done by “Kid’s Money”  says that  the “average” allowance varies  by age and gender.  Up to age 9 or 10, $5 per week is the going rate, while ages 11 through 15 it’s about $10 per week.   Older teens receive an average of about $20 to $25 per week.

I interviewed some parents and also did some quick research – many parents of teens give their allowance to them monthly.  Or at least twice a month.  This is to require them to budget.

Jobs

A recent study by the Center for Labor Market Studies at Northeastern University showed that teenage employment from 2005 to 2007:

• went up in homes with incomes of $150,000 a year
• 14 percent of teenagers from families earning less than $20,000 a year work
• 26 percent of those whose families make $60,000
• 32 percent of those earning $80,000
• 33 percent of those between $120,000 and $150,000.

It is impossible to quantify how many affluent parents have trimmed allowances in recent months — or how many of their teens have looked for jobs due to the cut-back. Some interviews I read reveal that  many youngsters from well-to-do families seem to have found a new work ethic as the economic crisis  has jeopardized their parents’ jobs and investments.  It  has also led to less spending money for Saturday night movies or binges at Abercrombie & Fitch.  For instance,  job queries from teenagers are up 30 percent over last fall at the Westchester mall in White Plains.  However, teens are having to compete with out-of-work adults for these minimum wage jobs.

I think it’s also fairly common that high school seniors try to work the summer before college to earn spending money for college.  In Greenwich, Conn., a Web-based program that connects high school students with nearby job opportunities has attracted 100 seekers each month since September, up from 40 to 60 a month last fall. Teenage participation in the national labor force has fallen steadily since 1979, when 49 percent of all 16- and 17-year-olds had some kind of work; last year, the figure was 30 percent.

Since the 1990s, many high-schoolers have been discouraged from paid work, and steered instead toward volunteer service projects. Rebuilding homes in New Orleans or teaching English in developing countries, seemingly better for admittance into Ivy League schools, supplanted after-school or summer jobs scooping ice cream or answering phones.

“There’s been such a push to demonstrate to colleges that they’re involved with activities and charities that it’s almost too pedestrian to say that work is part of what I do,” said William S. Miron, the principal at Millburn High School.

Brent A. Neiser of the National Endowment for Financial Education, a group based in Colorado that offers financial literacy programs, said parents tend to “shortchange the benefits of scut work” but that even ho-hum employment can be valuable — and impress admissions officers.

How much is enough?

The question of “how much” is almost always the first question a parent will ask when discussing allowances.   How much depends on “why?”.  When I think of an allowance for teens, I’m thinking about using it as a tool for them to learn how to manage and budget money.    It is neither an early version of a “paycheck” nor a subsidy for school necessities, food, clothing or shelter.  In our house, we don’t associate it with chores as we think chores are something everyone should do regardless of payment.  I know  plenty of parents who don’t agree with me on this.

Paying teens an allowance involves more than giving them money. When teens get an allowance they learn about budgeting, short-term goals, and saving for the future.   But we wanted to pay them an allowance to help them learn how to budget for college.

What to Consider

• Weekly expenses. According to the MSN Money site, as children get older “they will have to take on more responsibility for their spending habits as their allowance is increased.”
• Expectations. According to the Teen Help site, parents  should make allowance expectations “clear and reasonable.” Some parents even pay for good grade performance – I’m not one, but I know plenty of parents who like this approach.
• Special expenses.  When my son went to school in China for 2 weeks, his expenses were above and beyond the normal – we calculated this into our equation.
• Exclusions. What does it NOT cover?   medical bills, school supplies, school lunches, sports fees, major clothing purchases, car maintenance, gas, or birthday gifts.   Every parent I talked to had a different combination of what was covered AND the exclusions.
• Spending habits. According to Bankrate.com, allowances need to be adjusted for age. “As your children get older, they will have to take on more responsibility for their spending habits as their allowance is increased,” the site says.  As parents, we raise it all the while knowing they will make mistakes…that’s kind of the whole point of the exercise.  Even though it can be painful for parent AND teen.
• Mandatory savings. “Kids an Money: Allowance and Spending Decisions,” an article on the Family Education Website, tells parents to pay kids in bills that encourage savings.

The Bottom Line?

The amounts for allowance, ranged from $40/week to $100/week( if it included gas for the car, clothing  and cell phone bill).