When you are sick of negotiating finance or having spending hassles with your teenager, you might consider starting an allowance. An allowance can be used for all sorts of spending, food, movies, school expenses, haircuts, birthdays or Christmas shopping. If I am having ongoing issues with how much my kids spend or manage their money, I set them up on a clothing allowance which always helps keeps things much more organised.
I’m going to show you exactly how to set up your young person for success with an allowance. We start with clothing because it is often what they spend the most excessive amount of money on other than junk food and entertainment.
There are always ground rules that have to be agreed upon for an allowance to work long term. The whole point of an allowance is to teach the young person how to manage their spending and be responsible for their own expenses.
Gradually, you as the parent will be out of a job. That’s the goal!
QUESTIONS TO AGREE UPON FIRST
- What they are responsible for purchasing?
- How much per year, per term, per semester?
- How the money will be given/paid to the young person?
- How will they keep track of their spending and allow you oversight as they go?
- What will happen if they overspend and haven’t purchased items they need?
WHAT THEY MUST BUY WITH THEIR ALLOWANCE
First of all, there are ESSENTIAL items for your child’s health, school, and sports activities that have to be purchased.
- School clothing/uniform
- Sports uniforms
- School shoes
- Underwear and socks
- A waterproof/wet weather jacket, hat & gloves
Then there are the GENERAL PURPOSE ITEMS. These are items they purchase for everyday casual wear. Not all of these items are needed every season and lots of items (when looked after) last multiple seasons if they are not outgrown. I have created a list of items for you and your teen to choose from that can be purchased with their allowance. Remember, these aren’t essential to survival because they have clothing for school, sports and bad weather. This is casual wear for fun and relaxation, don’t assume they NEED all of it.
- Tops & T-shirts ( 6-7) A shirt for every day of the week.
- Cardigans / Jerseys (2-3)
- Casual shoes (2 pairs) One super casual, and always a tidy pair for social events
- Fashion Jacket (1?) these aren’t essential but can replace one of the Cardigan / Jersey options
- Jeans / Pants and Shorts (5-6 items)
- Dresses & Skirts (2-3) Girls can purchase these instead of shorts.
It is important to note here that your child does not NEED all of these things. What they choose to buy with the money they are given is entirely up to them and will ultimately be what causes them to learn and make better choices next time. They only require clothing to be warm and comfortable in the season that you’re in.
HOW MUCH MONEY WILL YOU GIVE THEM?
Until they have proven themselves at least a little trustworthy of managing their money, I would suggest that you agree on how much money they need for their school and sports and other general items, and have them shop for these first. Decide a realistic amount you will need for each item and go from there. You can’t afford for them NOT to have these items if they overspend in their allowance, so they come first.
Not until all of this is calculated/purchased can you decide on an amount you think is reasonable for them to spend on clothing for fun and relaxation. If they do not need to wear a uniform for school, then you still have to provide sensible and tidy clothing, not special, perfect, or top-of-the-line items, but presentable and comfortable for them to do their work.
EXAMPLE OF COSTS
Essential Items with approximate prices
- Underwear (7-8 pair) Varies between male & female > $100
- Socks (7-8 pair) > $50
- Pyjamas (2 pairs) > $40
- A waterproof/wet weather jacket > $80
- Hat & gloves > $30
> SUBTOTAL FOR ESSENTIAL ITEMS $300
General Wardrobe Items with approximate prices
- Tops/T-Shirts (6-7) > $20 each > $150
- Cardigans / Jerseys (2-3) > $25 each > $75
- Casual shoes (2 pairs) One super casual, and always a tidy pair for social events > $50 each >$100
- Fashion Jacket (1?) Not essential but can replace a Cardigan/Jersey option > $75
- Jeans / Pants and Shorts (5-6) > $30 each > $180
- Dresses & Skirts (2-3) Girls can purchase these instead of shorts > $40 each > $120
> SUBTOTAL FOR GENERAL WARDROBE $700
= TOTAL FOR YEARLY CLOTHING ALLOWANCE $1,000
I have been ruthless over the years and happily reduced this amount to make the kids work for what they want. Often giving them half this amount so that they learn to shop on the sales or buy pre-loved. They also look after the clothes they have because there is no more money coming. Don’t be afraid to put some limits on this, only give them what you can afford, and they will learn to manage.
HOW OFTEN WILL YOU GIVE THEM THEIR ALLOWANCE MONEY?
I guestimate what things will cost, some will be on sale, others will cost a little more. But now I can plan for this amount and budget accordingly. Once I have an annual amount I divide it up according to how often the individual prefers to shop. Either twice a year at the start of summer and winter or 4x a year, at the beginning of each quarter.
Each person in the family has a set amount for the year, they are given a portion of that amount when they need it, and when it’s gone, it’s gone.
Hopefully, they purchased everything they needed.
What they purchase each time they shop depends on what they need at the time. I have written a complete article on how to determine what they really need for clothing in HOW TO ASSESS THE WARDROBE BEFORE YOU SHOP. Help them be sure about what they need, then they can determine what each of these things might cost to buy and if they have enough.
HOW WILL THEY KEEP TRACK OF SPENDING?
We took cash which made it easier to keep track of what was left to spend. Expecting them to keep receipts so that you can return things or keep track of spending is good accountability, either file the receipt, take a photo of it, write it in your diary or put a note on your phone. I had to do this because we would often forget what has been spent, and that was really annoying!
It is always going to come down to the trust you have in them and their honesty with you. They can always trick you if they really want to. Asking for receipts, checking bank transactions or balances are precautions you can try. In general, you will know if they are being wise by what they show you after shopping or the clothing they wear afterwards.
WHAT WILL HAPPEN IF THEY DON’T PURCHASE WHAT THEY NEED TO?
Depending on what it is, a jacket to stay dry? Maybe they will have to make do with an umbrella this season?
If it is a sports uniform, then you as their parent will have to provide it and it will come off their allowance next time. You don’t have to rant and rave, the punishment is having less to spend next time. It’s pretty simple.