School allowances

By Francisco J. Colayco, Ph.D

QUESTION 1:
How do I decide on the school allowance of my children? Something that is not too little and yet not too much?

REPLY 1:
You need to compute what your kid will use his allowance for. Usually, a child needs to have transportation, food, school supplies and just a little amount for emergencies. For food, the best system is to provide your child food both for snacks or lunch that is prepared at home. It is much cheaper to buy food from the market or supermarket rather than from the school vendor. Plus, you can choose healthier food from the house rather than those available in school. If your child has to buy food at school, just give him enough to get by without getting too hungry until he gets home. Remember that food in school is not to be considered as the full meal at home. If you agree with this thinking, you will not need to provide excessive school allowance to your child.You need to make your child understand this important savings tip so that he will cooperate with you.

For transportation, if he can walk, that is the best option because it provides the exercise. He can bring an extra shirt if he will perspire along the way. If the school is too far, it is better if you can arrange for him to ride in a bus/jeep/car sharing. If you have a car, you can be one of those who will share your car during some days of the week.

School supplies should be bought in the supermarket or the bookstore together with your weekly groceries. It is much cheaper this way rather than from small vendors.

If you are paying for everything and the money is only for emergencies, it depends on what you can afford but always in moderation. I would suggest that you give your child a little extra money to give him the option to save. This is of course only if you have discussed with your child the importance of saving and what he can get with his savings.

QUESTION 2:
My neighbor's child can save from his allowance. My child, no matter how much I give, spends everything. How can I teach him to be more thrifty?

REPLY 2:
You cannot just compare your kid with the other kid without knowing all the details. As I explained earlier, you have to compute what your kid has to pay for and put up a system like I explained above.

In addition, parents have to be role model to their children. They have to know how to save to be able to teach their kids how to save. My book, Money for Kids, discusses this thoroughly together with stories to illustrate.