Allowance for Kids
When it comes to giving allowance for kids, parents have various opinions on the subject of money. Some may see it as teaching money management as a value in their kids in an early age, and others may think it is not the right thing to do. There are some who believe that setting allowance for kids can cause problems. For example, if you give your kid money to buy food, he or she may spend it all on a bag of colorful candies. Your kid, then, will ask you for more money, or pester you for it until you give up and give in.
Giving a certain amount of allowance for kids can help in teaching them responsibility, encouraging them to save money, and making them learn the value of discipline. A simple desire to buy a wonderful toy or a lovely pair of shoes can inspire the value of savings in your kids. This is important if your family runs on a limited income and giving allowance for your kids teaches them to take responsibility with what they buy. It can teach them to buy only what is important and save up for the things they want.
Giving Money to Your Kids
There are ways when giving allowance for kids can be a positive experience and here are essential things you need to know if you’re planning of giving one for your kid:
1. Talk to your kids and define to them the purpose of giving an allowance. Remember that each child is different and you must be sure they are of the right age to understand the value of saving and spending money. Make sure that your kids are ready to receive the allowance.
2. Reinforce the idea of saving up by giving your child a piggy bank with his or her first allowance. It can even be a positive competition among your children on who can fill up their piggy banks the fastest. If you want to have a more personal approach, you can have a fun activity with your kids and recycle items in your home to be their personalized piggy banks.
3. How much you give your kids depend on how much your family earns. Some parents do a dollar increase with each age. You can look into your child’s spending habits and consider what he or she will be buying with the money you will give.
4. You can set rules by letting your kids expect allowance when they have done something good like household chores. This will help them be responsible, making them learn the value of hard work to earn money. You can give bonuses for a job well done, or when they have good grades in school. You can be creative when setting rules like signing a mock contract between you and your kids.
5. Set up a special allowance for your kid’s clothing needs, which is separate from the allowance that you are planning to give each day.
6. Help your kids count their savings every week or every month. Your attention to their saving habits can motivate your kids to save more. You can even match their savings by offering rewards when they reach a certain savings amount. This can be a monetary reward or a surprise gift.
7. Make a list or chart of your kid’s savings and simulate a bank for your kids. This will teach them an idea on how to save money in a bank, until they are old enough to do it for real.
8. Your kids will enter a trial-and-error stage when it comes to managing their allowances. It is important that they are taught earlier, specially when having good money skills are not widely taught at schools.
9. Encourage your child to give money for a good cause. You can make your kid participate in fund-raising activities for kids, which will teach them to use money raised from selling lemonades or freshly-baked cookies and give the proceeds to charity.
10. Be a role model. Your children will learn by your example and it is important to make everyone in the family participate in your agenda of wise money spending. Make your kids part of small money decisions like buying food from the local grocery, where they can help sort what is a good buy and what is not.
Eventually, you can cut your kids’ allowance as they grow up and get a part-time job they can do after school. It is important to make saving money an enjoyable habit that teaches them to spend their allowances wisely. Reinforcing them to save will just instill a rebellious attitude that will be counter productive. When you teach your kids how to budget their allowances, you are helping them become financially-responsible adults in the future.
RESOURCES:
Docstoc.com. “ The Top 7 Tips on How Kids Can Save Money and Stop Wasting All Their Allowance at the Candy Store. “ August 2009.
http://www.docstoc.com/docs/9961164/The-Top-7-Tips-On-How-Kids-Can-Save-Money-And-Stop-Wasting-All-Their-Allowance-At-The-Candy-Store_
Marquit, Miranda. “ Your Kids Should Earn their Allowance. “ August 2009. Main Street.
http://www.mainstreet.com/article/family/kids/your-kids-should-earn-their-allowance
Harvan, Michael. “ Allowances for Kids – How Much and For What? “ August 2009.
http://ezinearticles.com/?Allowances-For-Kids—How-Much-and-For-What?&id=2727524
Atty. Waggoner, John. Block, Sandra. Chu, Kathy. “ Allowance For Your Kids. “ 2009. Nolo.
http://www.nolo.com/legal-encyclopedia/article-29820.html
Money Instructor.com. “ Allowances for Kids. “ 2002-2004.
http://www.moneyinstructor.com/art/allowances.asp
