If you are going to teach kids about money they will have to have some actual money to use. The best way to do this is through an allowance. Here are some guidelines for you to follow.
Teach Kids About Money â Allowances are Earned
If you want to teach kids about money by giving them an allowance, the best thing you can do is to make them earn an allowance by giving them chores or tasks.
These chores should be age appropriate so that they can be successful at earning the allowance. The chores should also be above and beyond what is expected from them on a daily basis. That means no allowance should be tied to brushing their teeth, practicing piano, doing homework, or any other task that is a part of being a member of the household.
Teach Kids About Money â Allowances are For Certain Expenditures
It should be clear to both you and your child as to what they should be spending their allowance on. You should not make them spend their allowance on clothes if they are young or any other staples that are part of the spending of being a parent.
A good guideline is that spending should be for wants rather than for needs. The things that they want in a store but donât really need should be what they spend their money on. If they want a toy or gadget, they should learn that these things cost money and they need to use their hard earned money to save up for them. This will reinforce that money doesnât grow on trees and has a value.
Teach Kids About Money â Parent Guidelines
As a parent you have a few responsibilities and guidelines you should follow with regard to the allowances. If your child earns the allowance you should pay them. Donât use withholding allowance as a form of punishment. Misbehaving should be addressed separately from money earned from chores.
Make sure you know what they are spending their money on so you can use it as a teaching lesson. When they blow their allowance the first day you can then show them later that if they had saved some of it they would be able to make a certain purchase or pay for a particular activity.