Making sense of allowance
By Allison Eatough
Elaine Morgan and her husband, John, wanted their children to learn the value of money early on.
So when Katie and Ryan were in elementary school, the Ellicott City couple opened a savings account for each of them. Whenever the kids received money as birthday or holiday gifts, they had to put half of it in their savings accounts and give 10 percent to charity, Elaine Morgan says.
“They got in the habit of saving,” she says. “And the importance of giving back.”
But as the sister and brother neared their teenage years, and their understanding of money grew, the Morgans agreed it was time to give them more financial responsibility.
They began giving their children an annual allowance in the summer based on academic performance and not chores, Morgan says.
“To us, that’s the most important job,” she says. “The rest of the chores around the house, that’s just being part of a team, a part of our family.”
According to the American Academy of Pediatrics, about three in five teenagers receive an allowance. Experts say whether given weekly, monthly or annually, an allowance is one of the best ways to teach children and teens overall financial responsibility, including how to save, spend and budget money. Click here for our full story Does allowance pay off for kids?