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Money, Money, Money...

How do you teach a child about money management choices.

So, my husband and I have decided that with our daughter enteringkindergarten in the fall will come more responsibility (cleaning her room, doing homework in a timely manner, putting away her laundry). And with more responsibility will come, dare I say it, an allowance. I'm not talking much here, just a small monetry amount that will be hers to do with as she wishes.

Well, of course with me it's not that simple. I try to create a lesson in every experience. I feel that a milestone as big as starting to get an allowance needs much consideration and discussion, as it will potentially mold how she views money and deals with her finances for years to come. I know, poor kid, right?

Anyway, I heard (or read) somewhere that money received, be it an allowance, a gift or a salary, should be split into thirds–1/3 for savings, 1/3 for spending and 1/3 for charity.

I like this idea. I don't follow that rule myself, but think it could be a good starting point for my daughter to learn some financial responsibility. She also just happens to have three money banks in her room. We were going to make the amount simple like $3 a week and have her get in the habit of breaking that, and the money she makes recycling our cans, into 3's.

Liz Wood June 22, 2011 at 02:20 PM
I think starting an allowance is a great idea, assuming your child is ready. I think the idea of starting off with completing chores first, is a good way of knowing if he/she is ready for the responsibility of an allowance. My son is also entering kindergarten this year, and he is nowhere near ready for that. We are still working on him getting himself dressed! I do, however, have him make choices at the store. Does he want a cookie or a car. If he wants the car, then he can't get anything next time we are at that store. When I do start an allowance, it will be his decision if he is going to save it for something large or spend it on little things. I think by making the decision himself, he will learn more. As far as charity, I'd rather have him do a service than give money. But that's just my opinion :)
Michelle Petroccio June 23, 2011 at 02:15 PM
My little guy is quite comical with money. He scrounges cahnge from around the house and from our cars. When he wants something, he always has a little stashed cash of his own, but most of the time he likes to buy something for mom, dad or his siblings with it. My middle two depend on gifts they get from birthdays and other holidays and use it to buy things they want.
Abbie Walston July 08, 2011 at 04:48 PM
I never got an allowance growing up, but I did get paid for working in our family's farm market. My parents taught me how to manage money, I had my own savings account and I gained an appreciation of how long I'd have to work to pay for something frivolous. I don't believe in giving kids money "just because" on a weekly basis, but I do think getting paid for doing chores or work is a good thing!
Bill at FamZoo July 11, 2011 at 07:47 PM
Anna-Marie, a couple of quick tips for getting started with teaching youngsters about money here: http://blog.famzoo.com/2011/03/teaching-kids-good-money-habits-3-tips.html
Audra Wilder July 12, 2011 at 01:52 AM
This is a great resource - I love it - my daughter too will be entering kindergarten in the fall. she saves the can money, money she finds :-) and gift money - once a month we go to the credit union to deposit it into her own account - she loves it! Anyway - this is a neat site http://www.moneytrail.net/

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