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Kids learn life lessons from allowance
Children and money. Most of the time they soak it up, but money can also be an opportunity for children. It’s never too early to introduce fiscal responsibility and money management. Lessons of financial benefit and consequence can have a positive effect. Allowance provides a first-hand experience with money management.
When is a child ready?
The moment your little muffin says “gimme”, he is ready. But not all kids should get the same allowance. You need to consider: 1) age, 2) the goal of allowance, and 3) family’s financial circumstances. A six year old does not need, and should not have, the same amount of allowance as a 13 year old. One system recommends multiplying the age by some amount of change, like fifty cents. The goal of the allowance needs to factor in. Are your children expected to pay for all their extracurricular activities? Are they saving for a car? These are significant responsibilities and may necessitate higher allowance than the quickie toy from the dollar aisle. Finally, what can your family really afford? Weekly allowance for multiple children can add up. Allowance is a commitment from you. If you can’t pay one week, that will certainly be a lesson too so be sure you can follow through.
Lessons kids need to learn from their money
Allowance is an opportunity to teach saving, charity, and spending wisely. You can help your child by talking and planning for all three. What are they saving for? How much will it cost? Where will they keep the savings? Many experts recommend 10-20% of their allowance is saved for a large purchase. Explore charities the same way – what groups does your child favor and are there local groups where donations of time or money can be made? Spending wisely can be difficult. They will usually want to buy junk for short term gratification. Let them make mistakes. Bad investments will teach the value of making better choices.
Keep a written record so you both can see results
John Messervey from the National Family Business Council suggests creating a ledger. "Once a week write in dates and amounts and show the child how and where they spent their money, how much is left and how much they have in savings.”
Source: Kids Money
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Poll
What does your weekly dinner look like?
The whole family dines together at home
63%
The whole family dines together at a restaurant
1%
Parents and children eat separately
4%
Whoever is around eats together
21%
Every family member for themselves!
11%
Total votes: 5755