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Re-activateAs I'm planning to pull together my tax-related documents this weekend, I've got money and finances on the brain. High school and college math classes didn't prepare me one jot for the household finances/budgeting area of real life. While there's lots of money advice for adults on how to prepare a household budget, manage debt, and get a grip on investing, where was this advice when we were young?
One way to start you child on the road to a healthy relationship with money may be to give her an allowance. Once she's got her own money to work with, you can then coach her in the fine arts of wisely spending, saving, donating, and possibly even investing.
Once children understand that things cost money and they can identify coins (probably around age 3-5, depending on the child), then it's probably a good time to start an allowance. If a kid can say he wants to buy something, then he's probably ripe for learning about what things get bought with. Older children, with larger allowances, can take on more expenses from buying clothes to gifts for friends.
Here's where the learning about budgeting comes in: If the allowance is handed out on Friday and by the next Wednesday all the money's gone, then no buying until the next allowance is received.
The general consensus seems to be not to pay kids to do day-to-day chores around the house, the thinking being that all family members should pitch in to keep the household in working order and not expect to be paid for their efforts (Hey, if chores were tied to $, this momma would be rolling in the dough). But if you'd like your little dear to go above and beyond—like detailing your car or cleaning out the attic—then it's perfectly fine to pay them.
Learn more in the full Money blog post.
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