How To Teach Your Children About Using Their Kids Allowance Effectively
How To Teach Your Children About Using Their Kids Allowance Effectively
The way in which people handle their finances when they are adults will certainly be strongly related to how they had been caught to handle their finances when they were kids. The best way to teach children how to effectively use their money is by issuing them a kids allowance.
When doing this it is first important for you to determine at what age you are going to issue out the allowance and how much you are going to give. Ordinarily the money that you give will become slightly higher as they get older.
It is also important that you consider the chores that your children need to do in order to receive their allowance. Be consistent with how much you pay them depending upon the work they do, and consider offering them additional money if they are willing to put in additional hours.
When you issue out the children's allowance it should not simply be a case of giving the money depending upon the work they do. At the same time you need to discuss with them the importance of money management. Talk about spending versus saving and try to spark some interest in money concepts that they will take forward into adulthood.
Purchase them a piggy bank that has separate compartments. These compartments will be divided into money to spend, money to save, money to donate, and money to invest. Providing them with a piggy bank such as this will give them freedom over where they want to place their money.
You should also make your kids responsible for having to cover certain costs through the allowance that they receive. For example, if they want to buy a new toy then make them pay for it out of their own money. This will teach them the value of money that they have earned and they will begin to understand the difference between wants and needs.
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