Kelly’s Korner- Allowance

My kids have gone through ups and downs with allowance, as I've gone through my own financial struggles. From going from a two income home to one, it changes the landscape of raising children. How much allowance, if any? Extra Curricular activities? Anything that is outside basic necessities can become something that may have to be eliminated.

When we are speaking of teaching our children how to use and save money, sometimes these changing life experiences can actually teach your children to be more responsible.

Here is a list of things that you should keep in mind when deciding if allowance is something that you want to incorporate into your home.

AT WHAT AGE SHOULD YOU START ALLOWANCE

You can start introducing saving with a piggy bank as soon as children are questioning the use of money. Pennies, nickels, dimes, and quarters can be explained to 4 year olds, and piggy banks are always a great way to introduce saving.

ESTABLISH A 'PLACE' TO KEEP THE ALLOWANCE

The biggest problem I have with my children, is they never put their money away when they were younger. Lesson learned for mom.  Set up and establish that place for them. Check it often to make sure they know where it is, and how much they should have.

OPEN A SAVINGS ACCOUNT AT THE BANK

My kids don't want to put their money in the bank. They want to be able to look at it, watch it grow, and have access to it at any given moment.  Establishing a savings account can deter them from spending everything they've earned.

USE QUARTERS INSTEAD OF DOLLARS FOR YOUNG CHILDREN

Teaching your children to save, donate, and spend is easier when you use quarters, or other change, rather than using dollar bills.  It's a great way to introduce fractions, and portion control.

ASSIGN RESPONSIBILITIES

Money doesn't fall off of trees.  We need to teach our children that allowance comes from helping out around the house.  Whatever you assign your children, make sure that all of the children in the home have equal duties so no one feels that they are getting the short end of the stick.

SHOULD YOU BORROW OR LEND MONEY

Believe it or not, borrowing or lending to your children a few times can be a great learning experience. If they want to buy something right now, they have to realize that the duties still need to continue, and a pay off schedule needs to be created on the family calendar, where they know what they have to pay back, and the time frame they need to pay it back.  They will also will learn what it feels like to not have that extra spending cash, if they've already reached beyond their limits.