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When It Comes to Your Kids’ Allowances, Which Type of Parent Are You?

Starting your child on a weekly allowance is a big step. And to figure out how much to give to your child you need to figure your own parenting personality first. There are various kinds of parenting personalities when it comes to allowance, some beneficial and others damaging to the child’s development. Find out what type you are.

1. The Scrooges

The Scrooges are misers. Stingy parents who have enough to give their kids a healthy allowance but will not do so, only out of habit. Such parents close their eyes to the needs of their children and end up raising frustrated and irritable kids.

You are a Scrooge if you:

  • Encourage the habit of making your kids ask for money, and at the same time, inhibit independence, saving and budgeting.

And not all kids are likely to take it easy.

Good financial habits become alien concepts for the kids of Scrooges, since where there is no money, there is no opportunity to learn how to manage it. They end up resenting their parents and may even try getting money incorrectly. Sometimes, peer pressure gets the better of them because they are constantly frustrated knowing their parents can deliver but will not. The kids of Scrooges are most likely to grow up with unhealthy complexes.

If you are one, it is time to add kids’ allowances into your budgeting plans every month.

2. The Spoilers

The Spoilers are parents who believe in giving. This can go two ways because there is a very fine line between giving just enough allowance and spoiling the child.

You are a Spoiler if you:

  • Give your kids an allowance that is massive! So much that it allows them to get what they want without any worry about affordability.

Parents who believe in giving – the right amount without a fuss – are rewarded with kids who have greater chances of growing up into responsible adults. This is how it works: The child trusts the parents and in turn feels the trust that they have in the child – helps in shaping a wholesome personality. Trust begets trust and rewards the right kind of spoilers with happy, satisfied, and well-balanced kids.

On the other hand, if you cross that fine line, you end up with spoilt and unmanageable kids with too much money at their disposal. Such kids are used to getting it all. There is no pressure on them to work hard, or even work at all. Spoilers can actually ruin their kids’ futures.

If you are one, speak to your children about needs and wants. Play with allowance amounts based on their activities and school schedules.

3. The Methodical Ones

Methodical parents have it all worked out, literally. This lot is partial to excel sheets and figures out every last detail. Their kids and allowances are no exception.

You are a Methodical One if you:

  • Use data to determine the allowances for your kids. You calculate variables like the area that you live in, the school that your child attends, and the amount of money that is a reasonable sum for the canteen and the even budget in some entertainment expenses at the neighbourhood mall.

These kids get only as much as they need, which means no extras. Kids of methodical parents get no splurge money because the amount is all worked out. There are cons though! Since they end up spending all that they get, there is no money left over – even for saving. As a result, the concept of saving becomes alien to them. Kids of the Methodical Ones don’t learn a basic life lesson because their financial lives have been so micromanaged.

If you are a Methodical parent, teach them the art of sacrificing their pleasures and saving for the big treats. Alternately, add 5 dollars and get them a savings account.

4. The Incentivisers

The Incentivisers are parents who believe in rewarding kids with money. It’s a case of accomplishments being rewarded with money or gifts.

You are an Incentiviser if you:

  • Treat the allowance as a treat or reward for work well done or good behaviour.

This is a great system because it teaches kids the value of money, hard work, and achievements. But the moment you make a habit of this system, you end up corrupting your child. Here’s how: the child, at an impressionable age, learns that only on doing a certain activity will he get money in return. This makes the child very selfish and self-centred, and he proceeds to treat his own transactions in all spheres of life the same way.

If you are an Incentiviser, throw in treats now and then, just not dependent on good behaviour or school work. Let them enjoy a Friday treat on a midday dessert money on a whim.

5. Ang Bao parents

Ang Bao parents are parents who typically give money to their kids on festivals.

You are an Ang Bao parent if you:

  • Believe that the concept of a monthly allowance doesn’t quite exist and is to be offered only as a gift on birthdays, CNY or other occasions. The rest of the time, allowance becomes a need-based occurrence.

True, giving kids money envelopes during festivals is a nice tradition – it makes them feel special, they get some splurge money, and it carries on a tradition – but it is not a ‘system’.

While this may have worked earlier, it is now damaging for kids to depend on events to ‘make some money.’ These kids may reach out to their grandparents and relatives for a boost in their finances, which is damaging psychologically both for their self-esteem as well as for the impression they carry of their parents.

So instead of teaching kids to be independent, to operate within a budget, and to save – which are basic money lessons that you should be teaching your kids –  you are handing them a crutch!

If you are an Ang Bao parent, just extend your kindness to non-festival days. It will gain the trust of your kids, which is invaluable in the long run.

This article was originally published on and re-published on with permission.

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