Modern Allowance Strategies for Kids
As a kid, I was given first $5 per week for allowance, which gradually rose to $7, and eventually $13 as the years went by. I had chores, but my parents gave me the allowance regardless. The idea was to teach me how to deal with money responsibly, and allow me to make my own decisions on purchases.
These days, I have my own kids, and cash seems a bit less practical. I don't often have the exact amount they're owed. Further, my kids are good savers and they have too much cash on hand to keep in their wallets. They don't know where to keep it safe from their siblings and they don't want to store it all in their wallets when they go out. Also, cash simply doens't work online for those video game or Amazon purchases. Cash isn't king anymore.
So what other options are there? Credit card companies keep trying to push the idea of debit cards for kids. I have issues issues with this option. The first is that it's complicated. It's yet another account with a financial institution that the parent has to maintain. The second is that it's expensive. These things usually have a monthly fee involved that takes a serious bite out of a kid's earnings. Finally, it's redundant. You, the parent, already have bank accounts to handle these things. Why should you need another for a dependent?
I prefer to Keep It Simple Stupid. Something that just works, with no recurring fees and a dead-simple ledger to keep track of how much money each of my kids have. What could be simpler than the bank of Mom and Dad? You keep track of how much money they have, in an "account" which is simply an old-school ledger but in a convenient app form on your phone or on the web. Each time they receive money, just add it to their account. When they want to spend some money (like when they're going shopping or buying a game online) give them some cash or buy it yourself, and then deduct that value from their account. It takes two seconds, and instantly syncs with your partner so you always have a consistent view. Best of all, it keeps track of what the purchases were for so your kid can clearly see how they've earned and spent money over the years.
We here at KidCash think that a simple app or website is all you need and provides more flexiblity and convenience than debit cards. Give it a go.