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Should You Give A Teenager Allowance? Does it Make Cents?

Maybe you gave an allowance to your 7-year-old, and it was a simple matter of a couple of singles a week he could use to buy gum or Pokémon cards. Or maybe you thought about giving allowance but never really got around to it because you were just busy. But when the kids started to get a little older, paying a teenager allowance became a more of an issue.

Either way, adolescence is a good time to revisit this topic again. Your children want bigger-ticket items like cellphones, concert tickets, and designer clothes. They’re thinking about summer jobs, and you’re thinking about college expenses. Also, you were kind of hoping they’d be a little more responsible about money by now.

Where does allowance play into all this?

First off, you don’t have to give a teenager allowance. For some families, it simply isn’t in the budget. Also, Beth Kobliner, author of the newly released Make Your Kid A Money Genius (Even If You’re Not), has reviewed academic studies on allowance from around the world, and she’s found that there’s no consensus on whether allowance is always a benefit to kids’ financial development.

Ron Lieber, author of the bestselling Opposite of Spoiled: Raising Kids Who Are Generous, Grounded, and Smart About Money, is an enthusiastic proponent of allowance as a learning tool, assuming a family can afford it. “It’s in the same category as art supplies, books, or sports equipment. We want them to ‘practice money’ and get good at it, the same way we want them to practice and get good at all those other things.”

Guidelines for Allowance:

1. Allowance isn’t earned.

If parents decide to give a teenager allowance, it should never be tied to the completion of chores. Kobliner, Lieber, and nearly every other money expert agree on this—kids should do chores simply because they are part of a family. And being in a family means pitching in and working together. No one should be able to opt out of chores by forfeiting allowance.

2. Be clear about what allowance is for.

Another rule for successfully managing allowance is to be clear about expectations. Decide and communicate what you’re asking them to pay for with this allowance, Kobliner says. That’s going to be different for each family, of course, depending on your family’s lifestyle and needs.

3. Use allowance to teach about choices.

Lieber offers a straightforward philosophy to determine allowance or spending budget for your teen. “We want them to have enough so they can get all the things they need and some of the things they want, but not so much that they don’t have to make a lot of really hard choices.” It’s in making those choices, and having to tease apart their wants from their needs, that kids develop into adults who are responsible spenders and savers.

So maybe you’ll shell out for a Lands’ End winter coat, but not the designer name she wants. She’ll have to make the tough decision whether to take that extra money from the budget and sacrifice somewhere else. As Lieber says, handing over some of this control (and the consequences) is “a relatively low-stakes real-world experience in bargain-hunting and thinking about which things are most important to them.”

And that’s the bottom line about what parents should focus on when it comes to allowance in these years: we’re providing the opportunity to practice and fail now, when they’re still young and under our roof. Better now than in their twenties.

Sharon Holbrook

Sharon Holbrook is managing editor of Your Teen.

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