How much 'baon' should you give your child?

ABS-CBN News

Posted at Jul 14 2014 12:02 PM | Updated as of Jul 15 2014 05:41 PM

MANILA, Philippines - When kids reach school age, the subject of “baon” (allowance) inevitably comes up.

More often that not, it’s the child who asks for it, maybe after seeing his or her friends pay for food at the school canteen, or because their awareness and interest for money has begun.

What, exactly, is the right amount to give your child? This, of course, is a highly individualized matter since what will work for one child may not necessarily work for another child.

A variety of factors will determine how much you should give your child at any given time. For instance, you may have to send your child extra money during a field trip than on a regular school day. The key is to be aware of your child’s school activities and schedule, and to be flexible.

Before you give your child cash, make sure that he or she understands the concept of money — that it is used as a tool to get something in exchange. He or she can learn this as your child watches you buy items in stores. Take time to explain what you are doing.

As they grow older and have a firmer grasp of this concept, monitor their ability to do simple addition and subtraction. Once they can easily do mental math, you can begin to share a small amount of money.

Most parents begin by knowing how much food items are sold in the canteen or store that their child will buy their stuff from. This will help give you an idea how much money your child will need, plus this will help you to decide if it is better to let your child buy from the canteen or if he or she is better off bringing over the items from home. For instance, you might find that the sandwich sold at school is too small and too expensive, or that they actually serve good healthy meals that you would love your child to have.

Here are some ways to help you determine how much allowance to give your child:

How old is your child?

Younger children may not yet be knowledgeable or responsible enough to be handle money, and are better off bringing their baon in kind – nutritious food items and drinks in just the right quantities so they have enough to last them through the day, leaving the least amount to go to waste. A small group of parents when polled said children 8 years and older will start asking for money, but they were comfortable with responsible spending among children ages 12 and older.

How long will the child’s class sessions last?

If a child will be in school for just half of the day, then he or she would need less than a child who will be in school the whole day since this means the second child would need money for lunch and afternoon snacks as well.

Use food stubs for greater control.

Some school cafeteria offer prepaid meal/food stubs. These stubs are very handy for younger children, but are also convenient to use even for older children.

Determine the frequency of giving the allowances.

Younger children who have less ability to plan may need to receive their allowances daily. As they grow older, you can give this weekly or bi-weekly in order to let your older child learn to plan better. Pay attention to security when entrusting your child with larger amounts, and take time to check on your how your child safeguards his or her money.

Specify what their allowance should cover.

School-age children are too young to manage a budget beyond their needs for school. Specify clearly how the money needs to be used – food money should go to food, and not games. Older children may have more leeway on how to spend their money like on purchases of books or other small items. When they reach college, their allowance can cover transportation or gas money.

Allow older children to have extra money.

When giving money to older children, you can allow them to have some money left over that they can use to buy things that they need. This is a good way to introduce them to the concept of budgeting. As they grow older, you can adjust this amount, depending on your household budget, of course, to cover a few extras. What is important, however, is to make sure that your children do not have too much money in excess, so that they would better understand how things work when they reach adulthood.

Teach your children to save and share

Regardless of their age, teach your child to save a portion of his allowance. You can help a younger child save up for something he really likes – a toy or a game—and save up for this from what’s left of his daily allowance. You can help him keep his savings or even open a savings account for him. Talk to your older children about this as well and monitor how much they have set aside. You may even offer incentives for them to save, such as prizes or a small bonus if their savings reach a given amount.

Just as it’s never too early to start saving, it’s also never too early to teach children the concept of sharing. In schools these days, they discuss current events which can trigger interest in your children to donate to victims of disasters or aid people in need. Encourage this in them, but don’t simply give them cash to contribute. Instead, show them that while their parents can donate, their donations, no matter how small, counts too.

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Grow Your Money is an editorial partnership between ABS-CBNnews.com and Citi Philippines to promote financial education and provide helpful information to Filipinos on how to better manage their personal finances.

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