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Wednesday, May 04, 2005

Allowances

This is an excerpt from an email. I think this theory sounds pretty good.

Some families don't believe in giving allowances to kids, but I do — with certain restrictions. I think an allowance should come like a paycheck, on the same day each week, so that kids can begin budgeting mentally. You may, for example, say no to all requests for candy in the drug or convenience store, but a child with an allowance will know that he can pay for his own treats once a week. I don't believe in paying for good grades or for anything else that is the child's responsibility as part of the family (making his bed, tidying her room). Parents often start with 50 cents or $1 in kindergarten or first grade and give a raise of 50 cents or $1 each year. But it really depends on what you expect your kids to pay for — at ages six to eight they might be expected to pay for their own trading cards, for example. At ages 10 to 12, they might be expected to pay for a movie with their allowance. But if you expect your kids to put part of their money away for college each week, or to give a certain percentage to charity, you'll probably want to give them more.

Written by: Jean Chatzky. Jean Chatzky writes the back-page column in Money magazine and is a featured columnist for USA Weekend and Time magazine. She is the financial editor of NBC's "Today" show and her "Money Minutes" airs weekly on CNBC. Chatzky is the author of Talking Money and The Rich and Famous Money Book. Her latest book is the national bestseller, Pay It Down -- From Debt to Wealth on $10 a Day.

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