Should I Give My Teenager an Allowance and Why?


Published by Dr. Charles Gemmi

A Board Certified Orthodontist and a Diplomate of the American Board of Orthodontics, Dr. Charles Gemmi has been a practicing orthodontist with Orthodontics Limited since 2000 and is a member of the teaching staff at Einstein Medical Center. Orthodontics Limited is a Diamond+ Provider of Invisalign in Philadelphia and Hatboro, PA.

What is your teen going to purchase?

When you give your teenager an allowance, it should be with the intention that they are going to take over buying something that you would normally buy for them. Is this going to be lunch at school? Their own clothing? Their own entertainment? It does not necessarily have to be so stringently defined, but before deciding to give your teen an allowance, you should think a little about what that teen is going to be spending their money on. If you are handing them money just for the sake of handing them money, they probably are going to spend it randomly and not really learn the value of that money.

Before you start giving your teenager an allowance, it is a good idea to sit down and talk to them about a simple budget. For example, if you want to give them twenty dollars a week to buy lunch at school, talk about how far that money will go and why, if they spend the money on something else, they will not have the money to buy their lunches. If the money is for clothes, talk about the importance of saving up for an item that they really want, instead of blowing their money on impulse purchases.

Are you going to provide pocket change?

As a teenager, I was always appreciative when my parents would hand me a little spending money before I went on a trip or went out with my friends. They wouldn’t always volunteer to buy me a movie ticket, but they would hand me a five dollar bill so me and my friends could get some popcorn. This kind of “occasional” allowance, which was often a reward for helping out in the yard that weekend or doing well on an exam that week in school, was a helpful tool for both motivating us to take part in the weekly chore schedule and to put effort into our school work.

Sometimes that money did go towards popcorn. Sometimes, it was pocketed and squirreled away, into a jar to save for a bigger purchase. Providing a small amount of money that your child can do anything he wants with is a good way to teach the importance of saving. And, let’s face it, money, especially for a young teenager who is not yet old enough to have a job, is a great motivator. If you want to encourage your teen do work harder on their school work or to get a specific chore done, a little monetary bribe might not be such a bad idea. When we were kids, for example, my family lived in this house with five big pine trees behind it. Our father would give us a dollar for every trash bag full of pine needles and pine cones we presented to him at the end of the day.

What about larger purchases?

There are some larger purchases that many teenagers see as necessities. These likely include clothes and transportation for dances, along with technology like cellphones and laptops. How are you going to handle these larger purchases? A good way to teach your child about saving is to require them to save up all or a portion of these purchases. For the average teenager without a job, saving up to buy an expensive dress, rent a suit, or buy a laptop might be impossible. If you decide to help out your teen with those purchases, you might do so through a loan/garnishment system, wherein they get only a portion of their allowance until they have paid back that larger purchase.

What’s the bottom line?

The bottom line is that an allowance can be a great way for a teenager to start to learn about managing money. It can also, however, become a point of contention if you have not already decided how that money is going to be distributed and what it is for. If their allowance is a replacement for expenses that you would normally cover, make this clear before instituting the allowance. If allowance is a reward for getting chores done and performing well in school (two things that are often considered to be a teenager’s “job”), make this clear as well.

Avoid making allowance part of their routine, however. A teen should not be handed twenty dollars simply for existing. This can send the wrong message to your teenager, making it very difficult for them to learn both budgeting and the real value of money. There are real benefits to having your teen have to do some sort of work in order to earn the money they are given, and there are also real benefits to slipping them a little extra cash on rare occasions. If you think your teen is ready to handle the responsibility that comes along with money, then yes, give them an allowance.

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