Giving children allowances is a good way to begin teaching them how to save money and budget for the things they want.
How much you give them depends in part on what you expect them to buy with it and how much you want them to save.
Some parents expect children to earn their allowance by doing household chores.
Others attach no strings to the purse and expect children to pitch in simply because they live in the household.
A compromise might be to give children small allowances coupled with opportunities to earn extra money by doing chores that fall outside their normal household responsibilities.
How the money is used and how often they’re “paid”
Discuss with your children what they may use the money for and how much should be saved.
Make allowance day a routine, like payday. Give the same amount on the same day each week.
Consider “raises” for children who manage money well.
Tips for saving and spending
Piggy banks are a great way to start teaching children to save money, but opening a “real” youth savings account introduces them to the concepts of earning interest and the power of compounding.
While children might want to spend all their allowance immediately, encourage them to divide it up: spend some, save some, give some.
Help your children become savvy shoppers. Children need guidance when it comes to making good buying decisions. Teach them how to compare items by price and quality.
While not all children will understand and learn financial lessons at the same rate, it’s important to start introducing them to wise money management concepts early in life. As we all know, learning valuable life lessons at a young age is easier than trying to learn new lessons — or break bad habits — as an adult.
Information from Dailyfinance.com and Billshrink.com, provided by Debbie White, CEO,Village Credit Union, 601 E. Court Ave., 243-4400, www.villagecu.org.