2008 Year in Review

Kids's Money

Now that the fair is over and school has started, it is time to tighten the reigns on the money dealt out to kids. There are many different theories on allowances. In this article, we will take a look at money and kids and how to address the never-ending request for money.

It is our responsibility as adults to teach kids that we don’t have a bottomless pot of gold at our disposal. This seems obvious, but do you give your kids an allowance and do you teach them how to manage that allowance? Kids need to budget too, so that as they grow into adults money management is second nature to them. My recommendation is to start a small allowance at age 5, and teach the child to divide the allowance into categories: save, give (to church or a charity), spend (toys, candy, etc), and special treat (larger purchase: movie, video game, CD, etc). Pay your child with coins so that it is easily divisible into the categories. Label empty soup or vegetable cans for each category, and have your child decorate the can to engage them in the budgeting process. Pay your child an allowance regularly so that they understand when their “payday” is and they have a money routine. Periodically take the savings can to the bank/credit union and deposit the money into their account. Add money cans as needed for items such as the fair, vacation, etc.

If kids learn to save, give, and spend they will be much better off financially as adults. Isn’t part of being a parent teaching our kids the lessons that we learned the hard way?

by  Editor, theCity1.com
August 25, 2008