Best Way to Inculcate Money Management in Kids
Giving your kids periodical allowance is much better than buying things for them, as the latter will only increase their dependence on you throughout their childhood, making it a problem for them when they come of age. Allowing them to manage their own allowance can act as an excellent child development tool. You can also set some rules to ensure that some of the money is saved. Inculcating the importance of saving, early on in life, can help the person become responsible in money matters. Then again, it goes without saying that you should also monitor how your child spends this allowance.
How Much Allowance to Give?
You can start giving them a stipulated allowance right from their 7th birthday. In most cases, while determining how much to give, the rule of thumb is to give them an amount half their age in the beginning and gradually increase it every year. This will also keep your children happy, as they will have these 'annual' increments to look forward to. As they grow, you need to take their needs, lifestyle, and expectations into consideration, and raise their allowance accordingly.
How Much to Give for Chores?
If you are to make your kids responsible and hardworking, you can also give them an opportunity to earn more by giving them some chores. When assigning these chores, you will have to make sure that they will be comfortable doing them. You can't tell a kid in his preteens to iron the clothes, but the same can be an ideal chore for a teenager. The allowance that is to be assigned for these chores should also be at par with their difficulty level. Watering plants on the weekends, for instance, can earn him $1, while watering plants every day can earn him up to $5 over a week.
Chore Chart for Preteens
|Sorting the laundry||$2|
|Helping in the kitchen||$2|
|Cleaning large rooms||$2|
|Cleaning the lawn||$5|
Chore Chart for Teenagers
|Washing the car||$10|
|Mowing the lawn||$10|
Additionally, you can also have some consequences for not completing the chores assigned to them. It will ensure that the kids take these chores seriously.
You shouldn't include daily activities, like brushing teeth, making bed, or doing homework, in the allowance chart. These are ideal for child behavior charts. If they are made to do them in lieu of an allowance, it will adversely impact their mindset. Last, but the most important; when you give weekly/monthly allowance to your kids, you need to closely monitor how they spend the money and advice them on how to use their earning efficiently and save for the future.