June 18, 2013

Kids and Allowance

Categories: DivorceMoney and FinancesParents

Dollar

Do you give an allowance to your child?  Many parents often wonder what they should do when it comes to giving an allowance.  Giving an allowance can be a great opportunity for teaching important financial lessons.

Even very young children can begin to understand the concept of earning money.  Explain to your child that money is earned by working and that you can only spend what you earn.  To help your child understand what it is like to get paid on a schedule, begin paying your children an allowance.  Help your children set goals for how they spend and save their allowance, making sure that you as parents stick to the payment schedule.  Otherwise, the lesson may be lost.

You can start an allowance at an early age.  As soon as your kids start talking about money, you can use the time to teach them valuable lessons.  Once you decide to give your kids an allowance, you want to be consistent with the amount and frequency.  I find most parents have success starting with one dollar for each year the child has been alive.

So, if you have an 8 year old, do $8 a week or $8 a month.  Whatever fits with your budget.  Help your child divide the money three ways.  One third of the money save for the future, one third of the money to share with a charity or organization and the last third of the money to spend on whatever the child wants.

Nicole N. MiddendorfABOUT THE AUTHOR
Nicole Middendorf
Financial Advisor, Prosperwell Financial

As a Financial Advisor and Certified Divorce Financial Analyst with Prosperwell Financial, Nicole has been professionally trained in retirement planning for small businesses and practical investments for the general public. Nicole is a frequent contributor in the media, where she makes guest appearances to discuss personal finance. Nicole focuses on education for her clients for her mission is to help individuals to successfully manage their wealth and have the confidence to be in control of their financial happiness. Securities offered through LPL Financial. Member FINRA/SIPC. Learn more at www.Prosperwell.com

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