William Penn Life, 2000 (35. évfolyam, 1-12. szám)
2000-03-01 / 3. szám
Money management skills start with allowance Allowance Dos and Don’ts (as compiled by Kid’s Money) DO ✓ Base allowances on what the family can afford. ✓ Give the same amount on the same day each week. ✓ Let your children spend their money as they wish. t/ Let them learn from their spending mistakes. ✓ Talk to your children about saving money and how to budget ✓ Allow children to earn extra money for doing extra chores. ✓ Increase amount as child grows older. I DON’T X Give allowances for doing expected chores, getting good grades in school, or for being well behaved. X Withhold allowances for bad behavior, poor grades or failure to do chores. X Control or restrict your children’s spending. Money Links For more information about allowances, check out two books: Kid’s Allowances: How Much, How Often and How Come, A Guide for Parents and The Allowance Workbook for Kids and Their Parents, both by David McCurrach, editor of the Kid’s Money web site. Both books are available from Kid’s Money Press, P.O. Box 681861, Franklin, TN 37068. For a preview of the books, numerous articles on allowances and links to other useful web sites, you can log onto www.lddsmoneY.org. by Caryl Horan and Kendra McLeish Sometime early in life, usually around the age of three, children discover money. They figure out they need the shiny stuff in mom's purse if they are to get their paws on that special toy they just saw on TV. They know that money has rewards, it has power. But what they don't know is how much value it has. Most kids figure that if they beg long enough, no matter what the cost, sooner or later mom and dad will come through with the goods. That's where the problem is. Most kids are never taught the skill of money management until it's too late. Sometimes they get a few bucks for a birthday or Christmas gift, but most kids don't get a regular salary from their folks. First hand experience is vital to learning smart money management skills, but without the money, there is no experience. This is how an allowance fits in. Financial advisor David McCurrach, who started up a web page called "Kid's Money," says a survey of parents shows that about 60 percent give their kids an allowance. How to Start Linda Barbanel, author of "Piggy Bank to Credit Card," believes that as soon as your kids are old enough to ask for something in the grocery store, it's time to start up with an allowance. "Whenever a child says 'gimme' you know he is ready to be taught to save." Estimate how much you are already spending fulfilling requests to buy this or that each week, and then set that amount as their allowance, advises McCurrach. One formula is to give the child a dollar a week for each year of age. However, a four year old could start quite nicely with two dollars a week. It is critical that you sit down with your children first and tell them exactly what they are expected to pay for from their allowance. You can't tell them what to buy, but you can say their allowance is to be used in two areas: • Spending - Toys, candy, specialty clothing items and entertainment. • Saving -10 to 20 percent of allowance is to be put away to save for something they want that costs more than the weekly allowance. One expert suggests using a journal to keep track of where the allowance is going. It will show children where they spent their money, how much is left and how much they have saved. Chores and Allowances Many parents are prone to tie an allowance to weekly chores, but it is a mistake. "If the child doesn't need the money they get into trade-offs," McCurrach says, "like they won't clean the bathroom because it's not worth the two bucks." Besides, it is impossible to learn how to manage money without a regular income, and if one week there is no money it blows the consistency. Paying for "extra chores" is quite all right, especially if the child is after a high-ticket item. Just make sure that the chores are above what is usually expected of them and that the money earned goes directly into saving for that particular purchase. The lesson is "I can work harder for the special things I want." Remember, you are giving your kids an allowance to teach them the value of money. Sure, you could pay for the things they want. But, by having saved their own money to buy those things themselves, your children will learn patience, discipline and, maybe, money smarts that will last them a lifetime. Article reproduced by permission. Copywright (c) 2000 Bridges.com Inc. All rights reserved. Imi 4 Willi» Fm Life. March 2000
