We all have our own philosophies and methods for saving (or not saving) and spending (or not spending) our money. For me, these habits were instilled and developed early in my childhood by my weekly allowance that was given to me by my parents. At the time, I thought it was so neat to have real money I could put in my purse or piggy bank, and I often spent time counting it and organizing it, thinking about what I might spend it on. And now, looking back, I’m grateful my parents did such a great job by doing allowance right, because I think the things I learned as a child have stuck with me so that my family enjoys a reasonably healthy financial state today.
With this in mind, I would like to share some tips on the principles I think can help other parents really make the best of their children’s experience.
1. Start Early – Young children don’t yet understand the true value of money – they’ll take a nickel over a dime because it’s bigger – but with an allowance you can start to teach basic concepts like adding money together or making a purchase.
2. Don’t Make It A Chore – An allowance should be given free of any conditions or exchanges for work. Chores are basic responsibilities for everyone in the home, and shouldn’t be confused as something to get paid for doing.
3. Don’t Take It Away As Punishment – Psychologists are rife with theories on guilt and shame paired with money; try not to develop these issues in your children. Instead, when they misbehave, consider restricting television time or other activities.
4. Cash Only – Children need to see and feel things to understand them, so instead of keeping a ledger in an accounting book or writing a check, be sure to give them real dollars and coins that they can collect, play with and stash away.
5. Join in the Fun – And educate your children with guidance on what to do with their money. Talk to them about prices of toys you see in stores or in advertisements, and help them figure out how long it might take for them to save up their allowance in order to buy them.
Childhood is a prime time to get acquainted with money and is the age where we as parents want to begin establishing good habits, so keep these tips in mind and open up that wallet!