subject: How Allowance For Kids Teaches Them To Manage Money [print this page] How Allowance For Kids Teaches Them To Manage Money
Children can learn how to budget money with allowance for kids. The only real way to learn how to handle money is through personal experience. Parents can spend time going over what finances are and why saving is important, but without hands on experience kids will not retain the information.
Most people do not really know how to save and appropriate their funds until they are adults. This is usually through trial and error. There is far more error in the beginning, especially during the college years.
Once a child is asking for money and shows an interest in spending their own money, it is time to consider giving them an allowance. The amount given can be determined by figuring out how much is issued to them for all the things they ask for each week. Another way to determine the amount is to match their age, a dollar per year.
It may not be the best idea to link allowance to chores. Household chores are the responsibility of each family member. There should still be consequences for not doing them. Kids have a tendency to ask how much a chore is worth. They may decide they can not do that particular chore since it is not worth much anyway.
A discussion will be necessary regarding what they should be doing with their money. It needs to be clear what things will be their responsibility to buy since they are receiving an allowance. Ideally, there should be some for spending, some for saving and some for sharing. They spend on whatever is agreed upon, they save for when something exceeds their allowance and sharing can be for charity.
The whole point to having an allowance for kids is to help them to grow up and have the skills to be responsible with money. This is a skill that many adults are still trying to learn. It may be that no one took the time to instill good habits concerning it. Make sure your children get a head start.
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