How much allowance?
You'll hear a lot of "rules of thumb" out there (eg $1 times age, etc) but in our mind, they're all nonsense. They have the benefit of simplicity, but no connection to the real world. How could they possibly apply to all situations, all families, etc.
Here's a simple way top get rolling.
- Pick something simple - anything is fine - to get started on the system and get used to Active Allowance. You could even use one of the simple rules of thumb. Use it for a month.
- Over the next month, think about what you've already been spending or plan to spend on your children - Chocolate bars? Movies? Videogame rentals? It's different for every family, and every child. And think about other issues, such as teaching them about sharing (many families use a 5-10% rule of thumb) and long-term saving (many families use 10%). All of this is very personal and varies by family philosophy.
Once you're a little more experienced with the system, use the advanced Budget tool to help you work through the numbers. We suggest you involve your children in this. For example, for your 12 year old, you can make it clear that you're providing the "funding" to (eg) rent a videogame every two weeks - that doesn't mean he has to rent one. It just means that you're giving him the money equivalent - it's his to do with as he pleases. You get better understanding and better buy-in that way. For more Tips, check out the Tips section in our Help Guide.
If you'd like to see examples of what some other Active Allowance parents are doing, you can see real budgets in our Gallery. Click the Gallery menu item at the top of your Home page.