Teaching kids about money is such a great feeling for a parent who wishes to empower their kids to be able to handle her finances on their own with ease once they enter adulthood.
Kids will probably not learn money-management skills in their schools so it’s important for you as a parent to be able to guide them along the process so that day can be as prepared as possible to handle their money responsibly.
How Much Allowance for Kids is Enough?
Many experts believe it’s important to make a chore list for kids and start giving them an allowance when they are 10 to 12 years of age. However, I find it best to begin teaching your kids and an even earlier age due to our modern technology and the overabundance of information children receive at an earlier age compared to years ago; I have given an allowance to my seven-year-old boy for the last year and it has worked wonders. He knows exactly what his chores are and he has learned to save, and is very cautious before he buys something.
How do you figure out the amount of the allowance? Generally, you should figure on a weekly payment of a sum equaling their age. So, for example, a seven-year-old would receive seven dollars a week. If you can’t afford to pay your children that amount, then by all means give them what you can so that you can still teach them the responsibility of working to earn money, saving money, and saving up money to spend it on things they need or want.
Every now and then, whenever your child wants to make a bigger purchase, encourage your child to borrow money from you with the condition that it will be a loan and has to be paid back within a certain time frame. It’s so easy to spoil a child and buy the item for them outright but if you want to teach them the basics of borrowing money and paying it back with interest, here’s your golden chance!
Teaching kids about money also involves allowing them to get a savings bank account, usually at the age of 13. Consult with your bank to see how it works and encourage your child to open an account of their own. This will greatly benefit the financial future for any child as they learn at an early age how to manage their funds. It also gives them an incredible feeling of self-worth and pride; few parents take the time or even consider allowing a child to open a bank account but it is something experts highly recommend.