In most countries, primary school is compulsory. This means that your child has to attend school once they reach the age of 5.
If you want them to be in a good school and get a good education, then it is important that you allot a budget for their school.
When your child starts primary school, they will need a uniform, books and other items like pencils, pens and notebooks. You will also need to pay for lunch and breakfast at the school cafeteria.
Most schools have a monthly fee structure which requires you to pay an amount per month or quarter depending on what plan you choose when enrolling your child into the school. It’s important that this amount is enough so that your child can attend without any problems during his or her time at school as well as having fun.
The question is, how much allowance should we give our children? This is a very common question that parents ask themselves when their children start to grow up.
You don’t want to give too much money to your kids because they will only spend it on the things that are not important like candy or toys. But at the same time, you don’t want to give them too little because they will feel deprived of some of the things they desire.
Allowances help kids learn about budgeting
According to this CNBC article, “students without a financial education are more likely to have bad credit ratings and other financial troubles.” That’s why it’s so important for parents to talk to their kids about money. Don’t simply tell them what to do, but rather, give them some time to really put it into practice.
That’s why it’s a good idea to start your kid out with a small allowance so they can learn to budget their money at a young age. Instead of just giving them allowance on a daily or weekly basis, take it to another level: Assist them in keeping track of their allowance by helping them create a basic budget and saving strategy.
In other words, allowing your child some independence in their financial decisions while keeping an eye on their spending can help them feel more secure in their abilities. They may need to practice it in real life-situations, but they also need assistance.
Giving your child the financial responsibility for basic needs (like lunch at school) is a great way to teach financial responsibility while also giving them a sense of independence. Thus, they acquire some experience in the fundamentals of financial planning, an ability that will be crucial to their future success.
How much of a weekly allowance should be given?
The amount of an allowance should be determined based on the child’s age, the family’s financial situation, and the purpose of the allowance (i.e. canteen food, transportation, books, stationary, etc.).
The DollarsAndSense survey indicated that Singaporean kids in elementary school should receive an average of $2.25 per day, while those in middle and upper primary school should receive $3.10.
Allowance on a daily basis vs. weekly
For younger children, such as those in the early levels of primary school, a daily allowance may be the most practical option. Try switching to a weekly allowance once they’ve proven they can handle their own finances. This provides kids with more freedom and the opportunity to practice making responsible financial decisions. They also get experience in balancing priorities (i.e. If they splurge one day, they have to make up for it by being frugal on the other days.)
If you’re looking for advice, consider this: If you want to make sure you don’t go over or under budget, it’s a good idea to start by visiting the elementary school your kid will be attending and snapping pictures of the lunch menu and costs. Determine how much food they would require. Next, increase it slightly so that they have some room for additional savings. (If the stipend merely covered their food costs, they wouldn’t have much money left over for savings.)
As parents, it’s easy to get wrapped up in wanting the best for your kids that you neglect to think about your own future.
Allowance is a great way to teach children about money management, and it’s important that we, adults, do the same for ourselves too.
It’s important to set an allowance for our present and future financial responsibilities (such as potential schooling fees for our children), as well as for our retirement.
All of us fantasize about the day when we can finally settle into the lifestyle of our dreams once we reach retirement age. How else can we know that we will be able to enjoy our retirement the way we want to, with all the camping trips, European vacations, and time to ourselves that we have always dreamed of without having to worry about money until we have taken meaningful steps toward retirement planning?