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Expert Q&A

	By iParenting Staff iParenting Staff Experts

Is it a good idea to give a 4-year-old an allowance?

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 market place 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.

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.

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.

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.

If $1 per year of age per week sounds like a great deal, have them use the money for the future. For example, have them give some of the money to charity. Have them give some of the money to the family cause, and force them to put some of it into the bank.

The bottom line is not to simply give your child an allowance regardless of how much you decide is appropriate. Use this money to teach positive money habits and lessons.

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