Have you started to teach your children about money?
As a parent of school-aged kids, one thing I’ve wondered about was when and how to introduce the concept of money to my kids. Many parents start early, explaining the whole process of earning, saving and spending to their children as soon as they understand that their cool piggy banks aren’t just toys, but are also great financial tools.
I could tell, however, that the concept of money wasn’t something my kids could grasp early on, so I deferred the money lessons until recently. I think it’s time to let them know what all those coins and bills are all about.
Lots of you believe that the best way to teach your children about money is by giving them an allowance and by allowing the kids to learn through practice and application. My neighbor has a child in middle school who’s already fully aware about the concepts of saving and investing; he’s even bragging about how much he’s made on his Disney stock — and he’s only 10! Plus he’s extremely enterprising, often going door to door to sell his services to families (e.g. babysitting, petsitting, gardening, etc.). His parents sure did a great job of granting him an early financial education.
Your Kid’s Allowance: How Much To Give Your Child
I’d actually like to know how much of an allowance to give my kids. Apparently, the rule of thumb is to give a child $1 a week for each year of age. So a 6 year old is supposed to get $6 a week. To me, this seems like quite a lot (and for such a young age), or maybe I’m just out of touch? I got these results from this allowance calculator.
If you want more information about how to teach kids the value of money and how to manage it well, check out TheMint.org, an educational site that offers resources for grown ups and kids alike. For fun, I took a look at one of the studies they conducted, which was taken by 2,000 respondents. The study was on the subject of allowances, and provided these cool graphics:
Some of the findings in this study:
- Men are 3 times more likely to say “NO” to an allowance (compared to women).
- But those men who decide to give out allowances at all are actually more generous than women.
- Parents from the Midwest are cheapest about allowances. Those in the South and Northeast give three times more (for allowances) than their Midwestern counterparts.
- 70% of parents agree that a 10 year old should receive between $1 to $10 a week as an allowance.
- 65% say that the best age for a child to begin receiving an allowance is between 6 and 11 years of age.
While I learned some really interesting things from this survey, I do still have more questions on this matter: should you pay your children to do chores? And should you reward them with money for other good behavior (such as getting good grades, not getting into trouble, etc.)? There seems to be some debate about this, but I’m of the mind to give a kid a flat allowance to help the child understand the basics of saving and spending; I’m also open to having him/her “earn” extra bucks for going “above and beyond”.
Now for some parents, “above and beyond” includes chores and good grades, while for others, such good actions won’t count toward rewards since this behavior is what they already expect from their child. And there are those families that have the “earn your own allowance” policy. Whichever way you go would depend on your parenting style. So what do you think? Please free to share your ideas with us!
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