As soon as your child begins his school life, the issue of a child’s money spending shortly follows afterward. Your child learns that for a fixed amount of money, he can provide for his needs. He also learns to say the magic word – ALLOWANCE. Upon hearing of this, parents should then promptly teach kids important values – BUDGETING and SAVING. This leads to an important question: At what age should you start to give an allowance to your child? How much allowance is considered enough for kids his age?
Some parents prefer to wait until their kids are already tweens before they give an allowance. However, there are others who may start to give it at an earlier age because they want their kids to learn early on, how to make informed purchasing decisions. Without any fixed parameter to base on, you really have to rely on your own instincts, and decide on when you feel is the best time to give your child an allowance.
There is actually more to giving allowances than we usually perceive it to be. More than just giving a child spending money, it actually gives him an opportunity to learn important life skills like saving, budgeting and planning. Since you still can’t expect young kids to save their allowance to purchase necessary things, it is best to keep the amount modest.
Your child’s age is actually a determining factor on how much allowance he should get in a given time period. Although the amount may depend on your family’s income, many experts recommend that a child should get 50 cents to one dollar per week for every year of his age. If you can’t really afford to give your child an allowance that you think is appropriate for his age, be honest and talk to your child about it. He needs to understand that even though you want to give him an appropriate amount, you just can’t afford to do so for the time being.
It is also very important that your kids know the purpose of their allowance. Young kids may spend their allowance on food or clothing, which actually allows them to make buying decisions. By doing so, they also learn to make mistakes that are essential in developing the right skills.
Encouraging financial responsibility is very important because it can teach a child the value of saving and spending wisely. Perhaps you can encourage your child to keep a portion of his allowance so he can donate it to social activities of his choice. By allowing your child to help out at an early age, you are also promoting social awareness.
You also need to teach your child to allocate a certain amount for the future. He clearly needs to know that savings is not about money not spent. It’s really more about setting aside a certain amount before any spending takes place. Try to make saving fun by giving him a coin bank or you can even open a bank account suited for kids his age. He may be enthralled by the fact that he will receive updates or mails from his bank.
Teaching your young child about financial responsibility may involve a gradual and challenging process. Expect your child to make hasty spending decisions, and allow him to make mistakes too. It is through these that he actually learns how to better handle his finances.
If your young child finds himself in the brink of “financial instability”, guide him on how he can make better choices, and help him work through his solutions. Teaching a child essential life skills may not be easy, but with proper guidance and enough opportunities for practice, he will surely learn how to handle bigger responsibilities ahead.
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