The Budget

One key element of a successful allowance program is: The Budget.

Or in other words, what will you be expecting your child or teen to pay for? Having a budget is key. You and your child should create the budget together. It's best to put it in writing.

First, consider what you are already spending on your children or teen:

Toys & games, movies, iTunes, cell phone, school supplies, school
lunch, computer, clothing, summer camp, car/gas/insurance, college education, special hobbies, special trip etc.

Decide how much you will contribute to each budget item and how much you will expect your child or teen to pay for. For example, you might agree to pay for the monthly cell phone service, but have them buy the cell phone.

Next, help your child determine their short and long term goals.

It is important for your child to learn to include SAVINGS into their budget. Most people learn to spend first and save what is left over, if any. You will be teaching your child to "pay yourself first" by including savings for their goals as part of their budget.

Last, help your child determine how much they would like to give back to the community. You can help them research charitable organizations and decide on how much they would like to donate. Include this amount in their budget.

Your Action Steps:
Work with your child or teen to complete their budget.

Income will include allowance, birthday gifts, holiday gifts, part-time jobs, other.

Expenses will include spending (what you expect them to pay for), savings (short and long term goals), and sharing (charitable donations).