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Advancing Money to Your Child

When a child gets $5 or $10 a week, it may not go as far as she likes. She may have to put some money into savings that you don't let her touch, and she may be required to pay for some things on her own. This doesn't leave too much extra for miscellaneous things.

If your middle-schooler is short a few dollars before the next scheduled payment of allowance and wants to buy the school yearbook that has just come out, she may ask for an advance on her allowance. In this case, you may want to give her the advance she needs.

Money ABCs

Advances aren't only discoveries in medicine and science. They also payments made before they're due.

Piggybank on It

Keep track of advances. Parents have a way of forgetting what they've already paid to their child when allowance day rolls around. Then, if they overpay, they're only teaching their kids about bad memories, not about financial responsibility. Mark the advance on a calendar, or post it on the refrigerator door.

Before you accommodate her, though, make sure that you have some ground rules straight.

  • What's the money going to be used for? In other words, is the advance really necessary, or does your child just know you to be a softy? Maybe she can wait for another week's allowance to make the purchase. Maybe she can cut back on expenses for a time. Maybe she doesn't need to buy the thing at all.
  • Does she understand that an advance is like borrowing money? She's using money that isn't hers yet to pay for things. If her allowance is tied to doing chores, then she's really getting paid today for work she'll do tomorrow. She'll still have to do the work even though she already has been paid for it.
  • How often does she ask for an advance? If it's once and a while, you may be only too glad to oblige. But if it's becoming a habit and she's always a dollar short and a day late, you may want to just say no. If you grant her the advance, you're only encouraging her poor money management. She may have to re-examine her priorities: Does she need to buy everything she's spending her money on? Does she need to do all the activities she's using her money for? It may be a good idea to look at Teaching Your Child About Money Management, Savvy Shopping Strategies for Kids, and Setting Up a Budget for Your Child.

More on: Money and Kids


Excerpted from The Complete Idiot's Guide to Money-Smart Kids © 1999 by Barbara Weltman. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.

To order this book visit Amazon's web site or call 1-800-253-6476.

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