Giving your child a fixed weekly allowance can teach them to anticipate their spending habits and learn to budget their pennies accordingly. Most would say that these are great benefits.

Other people find a major fault in unconditional allowance. Sometimes, giving a child a regular allowance unconditionally creates a sense of unwarranted entitlement.

There was actually a study conducted by professor of finance, Lewis Mandell that found that teens who received regular unconditional allowance are not as motivated or financially literate as teens that don’t. Still, most parents cave into the idea of necessity and break their kids off with a few bucks every week despite the “dangers.”

If you’re considering starting an allowance for your child, here are a few things to take into account first.

1. Do you want to tie allowance into work?

Lots of parents give their kids allowance when he or she completes chores. The idea is that kids learn the value of work in relation to their earnings. Some parents don’t want their children to place much of an emphasis on the relationship between the bottom dollar and their happiness. Some argue that they don’t want their children to think of chores as “extra responsibilities,” but a part of being a family instead.

There are many ways to approach this. It’s up to you choose which works best for your child. Regardless, money management is something that comes out of giving your child an allowance for their work around the house.

2. Is my child ready for an allowance?

Some parents get hung up on when to start giving their child an allowance. Most experts agree that kids should begin to receive an allowance once they’ve displayed an understanding and interest in money.

See if your child knows how many quarters are in a dollar and gets the concept of “change.” These may be indicators of whether they are ready to manage their own cash or not. These concepts can become clear to children as early as age 6.

3. Should you make tax deductions?

Most say “no” to this question, but some parents feel it’s a good idea to make deductions as we do with our own paychecks. Obviously kids don’t yet have taxes applied to their paychecks but there are other areas you can apply deductions to. One mom used to give her son Paul $5 per week and would deduct a few cents for “taxes” and $1 for church donations and $1 for savings.

Paul was free to spend rest of the money however he chose. This prepares children for the harsh reality of taxes when it comes time to work their own jobs while showing them their obligations.

Did you get an allowance as a kid? Tell us on Twitter!

Written by Alicia Overby - Founder & President of Baby Elephant Ears

Alicia is wife, mother, and creator of Baby Elephant Ears. Baby Elephant Ears was created out of parental concern, not financial desire. In 2005, when their second child was an infant, he cried all the time and just couldn't seem to get comfortable.

After seeking advice and suggestion from the medical community and alternative medicine, they eventually ended up in the chiropractors office where their baby was successfully treated for asubluxation, discomfort most likely the result of the strain during labor, which was now being exacerbated by the normal lack of infant neck strength. Only proper neck, head, and back alignment would offer him relief. When they couldn't find a product to give their baby the necessary support, Alicia took matters into her own hands and crafted her own infant support pillow. The first Baby Elephant Ears was born!

For more information, visit www.babyelephantears.com.

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