When Should I Give My Kid a Raise?

by MP Dunleavey

When Should I Give My Kid a Raise?

Our money expert MP Dunleavey answers your question about your child’s allowance

Q. Considering the sorry state of our economy, should my kid get a raise in his allowance?

Wouldn’t it be lovely if we could all get raises, or at least cost-of-living increases, whenever we deserved or needed them? Unfortunately, that’s not the way things work, especially in a tough economy. And in this case, only you can make the call. But if you choose not to or absolutely can’t, do make time to explain your decision. Kids younger than 6 really can’t grasp that this money stuff comes in limited quantities (heck, some grown-ups still wrestle with that one!), and for them the issue probably won’t even come up anyway. For older kids, a matter-of-fact discussion will do. If, say, you recently had to take a pay cut, explain that you’ll be budgeting more tightly for now. Even if your finances are fine and you’re opting to maintain the status quo, this same reason works, too: When times are hard all around, it’s smart to take a few extra steps to save. Remember, an allowance is more than pocket cash. It’s the beginning of kids’ financial education. Which is why it’s important to weave money into regular conversations: “Here’s $1.50 for that slice” or “Let’s get these jeans; they’re five dollars cheaper.” That way, it becomes an everyday topic rather than one that always requires a sit-down.

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