Should I Give Weekly Pocket Money to My 10 Year Old Daughter?

Should I Give Weekly Pocket Money to My 10 Year Old Daughter

According to the 2019 Allowance Report which details the habits of young pocket money earners in the US between the ages of 4 and 14, it was found that a staggering 73% of parents choose to give their kids a regular allowance. Giving your young daughter a regular allowance – whether weekly, fortnightly or monthly – can help her form smart financial habits that she can take into adulthood such as budgeting and delaying gratification for the things she wants to buy.

So is it a good idea to give your 10 year old daughter weekly pocket money? In deciding whether a weekly allowance is right for your daughter you should always factor your personal family circumstances and values into the decision. You can only give your daughter what you can afford to, but far more important than how much you give her is why you are providing her with an allowance. After all, we introduce our kids to money not to allow them to buy stuff they desire, but to teach them the value of having money, using it wisely and saving it when necessary.

Weekly pocket money can be there to help your daughter out with things like buying a special toy or covering the cost of a trip to the movies with friends and buying candy, but unless she is learning the importance of managing money, then a weekly allowance may be nothing more than a failed (and expensive!) experiment. Below, we’ll look more closely at how your 10 year old may benefit from weekly pocket money, and how to approach giving your child a regular allowance.

What Does the Average 10 Year Old Receive in Allowance?

The national Allowance Report revealed that the average amount of pocket money given to a 10 year old in the US is $7.91 a week. This average weekly figure may be determined by how much a 10 year old typically earn for certain chores completed over a week, or perhaps how consistently good their school report card is for example.

Every family will arrive at a different allowance figure for their 10 year old child – some parents simply match the allowance to their kid’s age, e.g. $10 per week for a 10 year old and so on, but this may not be realistic for big families.

However you decide to provide your daughter with pocket money, it should be determined by personal circumstances – this means not only taking your personal finances into account, but recognizing if and where your daughter has earned the right to weekly pocket money. Does she help out with household chores? Does she behave well with siblings?

Perhaps you may decide that bi-monthly pocket money works out best, as this will help to encourage your 10 year old to save and budget her money well enough to have funds leftover into the start of each new month.

Quite simply, you’ll know your daughter is ready for the responsibility of managing her own regular pocket money if she understands these three basic truths: 1) that you need money to buy stuff, 2) saving money lets you buy more expensive things and 3) if you spend all your money at once, you won’t have any more until next week/month.

If you have an immature spoiled child on your hands, it can take longer for these basic lessons to be learned, but it is not an impossible task. In fact, giving them an allowance ‘test’ period of 2 or 3 weeks may be a great way to test the waters of their maturity around money and realizing that every little purchase that they may shrug off adds up.

What Will My 10 Year Old Need an Allowance for?

Before we detail the long term benefits of providing your young children with regular pocket money, let’s look at the immediate purpose of a weekly allowance in a child’s eyes.

The 2019 Allowance Report determined that the top 3 things kids were likely to spend their money on were candy, books and Lego. These findings reflect the spending habits of kids between 4 and 14, of course, so your 10 year old daughter may have other ideas, such as dolls or a music voucher for her phone or mp3 device.

As for items that US kids are likely to save up for, the report found that the top 3 items were phones, Lego and the Nintendo Switch. For kids saving $10 a week, a luxury item such as a brand new iPhone ($1,449) or a Nintendo Switch ($200) will be frustratingly out of their grasp. But this is where birthday money and extra paid chores can help if your 10 year old girl is desperate for these kinds of luxuries outside of Christmas.

Benefits of a Weekly Allowance

They learn the value of money – perhaps most important of all, kids with regular pocket money learn how money works, how it is earned and that it doesn’t grow on trees. Once your child is also earning her own money through chores, she can appreciate the value of working hard to reap rewards, instead of simply being ‘gifted’

Puts them at lower risk of adult debt – according to a European ING study of 12,000 parents, it was found that adults who were given pocket money as children had faced less debt than their counterparts. It also found that these adults were better savers and less likely to be overdrawn, proving that giving kids an allowance can give them the building blocks to become financially responsible.

Limits kid’s hassle power – once you’re giving your kids real money to use, they’re much less likely to hassle you at the store checkout for candy or a little toy. Having their own money makes them think twice about spending it on frivolous impulse purchases and will gradually help them become more spend savvy.

Disadvantages of a Weekly Allowance

They go spend crazy – with a regular weekly sum of pocket money, there’s always the chance that kids burn a hole in their pocket and spend the lot as soon as they receive it. If your child does this, it’s natural to be angry, but step back and allow them to make the mistake. It’s only by watching their siblings or friends buy the latest toy or game that they realize how important saving is (no matter how boring or time-consuming).

They compare and demand more – if kids hear that they are not getting the same amount of weekly money as their friends of the same age, they may start to whine and protest why this is, but don’t let this bother you. Other than the fact that your daughter’s peers could be exaggerating to show off, explain to your child simply that some families have less than others and that the amount of pocket money she has is not as important as how she uses it.

Choosing an Allowance Style that’s Right for Her

If you’re struggling to find a type of allowance that will work best for your daughter’s unique circumstances, Ron Leiber – a personal finance writer for The New York Times – believes there are three main approaches that parents can take when it comes to giving their kids a regular allowance:

No Free Money Allowance

By “linking allowance to the performance of chores” Leiber argues, “you communicate to your child that nobody gets free money in the world and neither should my kids.” Letting your daughter earn her weekly amount through chores like tidying her room and doing laundry once a week gives her a sense of empowerment and a connection that the money is only in her pocket because of her hard work.

No Chores Necessary Allowance

Conversely, a no chores policy means that the amount kids are given in pocket money has terms attached to how they use it to make them think carefully. For instance, give your daughter $10 but she can only spend $6 of this. The remaining $4 can be saved or put aside towards a charitable cause of her choice. Leiber does this with his own daughter and notes that “she spends a lot of time thinking about the (charity) jar.”

No allowance at All

Encourage your child to see that every member of the family pitches in with the housework, not for money but because sharing and splitting up the workload is a nice thing to do. Parents taking this approach can sweeten the deal by ensuring that the child’s background needs are met, such as candy or an occasional trip to the movies with friends. But for anything more expensive than this can wait until their birthday or Christmas (or with a particularly impressive report card from school!).

Should My Daughter Still Receive Weekly Payments as She Gets Older?

Once your daughter is in her teens and you can trust her to be more responsible with the money she gets, you could consider changing her pocket money from a weekly sum to a monthly one instead. If you give her $60 each month, for example, this will help her budget her allowance effectively to pay for new clothes or perhaps save up to buy something more expensive on her wish list.

In her teens, she may also wish to supplement her pocket money ‘income’ with a real one by getting her first summer job, and the aim at this point in her life is to allow her paid summer job or part time job to replace her pocket money altogether.

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