An allowance can encourage and motivate your child to help around the house.

Facts About Allowances for Kids

by Susan Revermann

Before you start handing your preschooler fists full of dough, you should get all your facts first. You’ll actually find quite a few positive aspects to establishing an allowance system. There’s no need to break the bank on this one -- according to child development experts at the Kids Health website, offering a weekly allowance of $0.50 to $1.00 per year of age should do the trick.

1. Motivation

It’s not just your child -- all kids procrastinate and dawdle from time to time. According to the American Academy of Pediatrics, responsibility and initiative “are learned through a gradual process of guidance and reward.” If you want to spark some motivation in your young child, you can offer an allowance for small, completed tasks around the house. Don’t get your hopes up too high -- you’re still going to have to continue to remind, prod and encourage for years to come.

2. Responsibility

Your youngster may argue until the sun goes down on this one, but children actually thrive on having obligations and assigned duties at home. These household tasks help develop a healthy sense of responsibility. By offering an allowance as payment for your child’s time and energy, it will show him cause and effect, work for compensation and reward for showing responsibility.

3. Trust

Paying up when your child has earned his allowance will strengthen your child’s trust in you. Consistency in a child’s environment is extremely important. He is more likely to continue to do his chores if he knows he will actually get paid on the assigned day or time.

4. Money Concepts

Earning money introduces your kiddo to the value of money and the concepts of saving, budgeting and planning, according to the American Academy of Pediatrics. Although preschoolers don’t really have the capacity to earn hundreds of dollars like a normal paycheck, you can start show your child the price of items that he wants. For instance, if he has his eye on an action figure or toy car, show him the price tag and break down how many chores he has to do before he can earn enough to get that toy. Don’t just buy the toy and tell him to pay you back -- that scenario doesn’t hold the motivation to work if he already has it. When he earns enough, take him to the store to acquire his prize.

5. Math Skills

Having money in his hot little hand will encourage his math skills. As a preschooler starts understanding numbers and counting, he can start counting the number of coins and bills he has earned. Move over play money, here comes the big bucks -- or dimes and quarters.

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