Teaching Kids How to Manage Money

Most parents wonder when the best time to start giving their child an allowance is. Experts say that your child should be able to count money before you let them have an allowance. A child that is still too young to understand what money is for won't fully grasp any lessons you try to teach them about money. Using allowance as a teaching tool for your child is a great benefit. This way the child is earning his or her own money and parents can show them how to properly manage it. Once you've begun giving your child an allowance, it is time to set boundaries with the money. These boundaries could include saving a portion of the allowance each week and spending limits.

Other important factors regarding a child's allowance is to decide how much the allowance will be, how often it will be paid, and what it's given for. Is this allowance going to be given as a reward for doing chores around the house or do you just want to give the child money as spending money? And just like at Mommy and Daddy's job, perhaps a child could get a raise as he or she grows older or tackles harder chores. The amount of allowance you give your child should be based on what you make so if a friend set his child at say five dollars a week and you don't make as much as he does. Then three dollars might be what you can afford to give your child.

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