Kids that are smart about money learn from the habits of
their parents. Being a money-smart
example is the best thing you can do to teach your children how to manage their
finances. This includes paying bills on
time, buying only what’s necessary, putting your “want to spend” money in
savings, and using cash to pay instead of credit cards.
I believe that allowances—as long as they are earned with a
combination of chores, achieving proper grades in school, and having a good
attitude/behavior overall—can give most children some real-world experience
with handling money.
Make sure that your child’s chores are age appropriate. Kids ages 5 or 6 can be tasked with putting
dirty dishes away in the sink. 12-year-olds can take care of yard work and
garbage maintenance. Make sure that your
daily routine allows enough time for your child to take care of chores and that
you pay allowance on the same day every week.
When children are old enough to go places with their friends
without too much parental supervision, raise your child’s allowance accordingly
so that they are spending their own money, not the money set aside for your
budget. Be flexible and compromise with
spending when a child has earned it.
Say, if your son wants to buy a new video game that costs $60, but he
only has $15 saved. Match his amount and
allow him to earn the rest by doing extra chores or volunteering in the
Giving your kids a strong financial foundation
has a lifetime of rewards.