Getting Square with Kids and Their Allowance

March 11, 2008

Above: Kid with money, need to learn budgeting from early age

Exposing children to budgeting and making their own choices will prepare them in handling/managing their money in the future. They can start as early as now and get them started by letting them handle their allowance. The key to the success of your child lies on baby steps that will help make all the difference.

Don’t Stash A Big Amount Right Away

To start with, don’t give them a months worth of allowance, they might be overwhelmed as they don’t have a background on being able to access such great amount causing them to make unwise decisions and we know how kid’s go when they see something that they want, immediately they would want to buy it for their concern lies more on short term goals and they are not aware of long term goals yet.

Motivate Your Kid

What motivates your kid to think long term can start on a week’s basis but first and foremost, motivate the kid first. Motivation can be found in different ways. An example would be, that you can bring your kid to the toy store and see which of the toys he would really want to buy. Once he has decided on a toy which you think he’ll be able to save for a weeks time, that when the motivation begins.

Set Awareness for Your Kid

Tell your kid that if he/she wants the toy so much that the kid could actually have the toy in a week’s time. Seat with your kid and explain, as long as your child knows how to add, its all good. Grab a pencil and pad and explain to him, make it seem like a game. Tell your kid that if he/she is able to save this much a day, he/she will be able to buy that toy in a week’s time.

Check On Him Daily

For that first week check on him on a daily basis asking if he/she was able to save up that much for that day. If something goes wrong and the kid went on saving make him work around what is left, ask what happened and give advices so you can determine and let him know where he got it wrong.

Always remember to keep your kid responsible for his budgeting, if he/she runs short on the actual day of supposed purchase of the toy, don’t let his/her whining and begging soften your heart to give. Let him be responsible so that he/she will learn.

If for a weeks time he was able to be successful and for a couple of weeks more, the you would know if he/she is qualified for another level until your kid is aware about saving for his future.

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Posted by Budget Saver under Saving |