Does your kid get an allowance? It’s easy to just hand over some cash and forget about it, but there’s more to financial education than that. Used correctly, and allowance can be a valuable teaching tool!
Discuss a goal with your child, whether it’s a new toy, a video game, or some other treat. Help them budget for it, and use it as an opportunity to discuss savings. Whether it’s in a piggy bank or a bank acccount, having a goal to work towards can help kids learn the value of saving and planning ahead.
Use a Balance Book
One way to help your kids learn to manage money better is by using an allowance book or note taking app instead of cash. Have them bring you a notebook or app to add money to every week or month so they learn to be mindful of income, and make notes of any money they spend in the notebook or app. By keeping an eye on their balance and having to think about it, they’ll get valuable training for using debit/credit cards in the future!
It’s easy to second-guess a child’s desires and what they spend money on, but that can be harmful in the long run. Sometimes it’s better to let them make their own mistakes and deal with the consequences rather than preventing the situation in the first place. If they spend all their allowance the first day on sweets and can’t buy the cool new toy, they’ll remember that next time.
Talk To Your Kid
Talking about money is something people often try to avoid, but it’s important to be honest with your children. Be up front about why they’re getting an allowance and how to manage it. Let them sit with you while you balance accounts or pay bills; it may be over their heads, but they’ll see that their allowance is important to building towards the same things you do. Encourage them to ask questions!
Do your kids or kids you know get allowance? How do you teach your kids better money management?