HomeSince we looked at your money situation last week, this week we'll look at kids and money.
There's no consensus on when to start teaching children about money, but usually by age 4 or 5, kids are old enough to understand some of the basics.
How much do you want your children to know? It's important to think about your own relationship with money, and to decide what lessons you want to share. Some moms talk to their kids a lot about money and budgeting, particularly when the kids are in a store and making requests for various things to be bought. Other moms feel funny broaching this topic, especially if money is tight; they worry that saying "We can't afford ___" can make a child worry about money or feel guilty.
In either case, a great place to start can be with a small allowance. There are at least three considerations: how much to give, what the child is expected to do with the funds, and whether or not you want the money tied to specific chores.
The amount of an allowance can be based on age (50 cents or $1 for each year in age, for example), or it can be a flat amount. If based on age, the advantage is that each birthday brings a raise, and the higher sum can bring with it added responsibilities. The advantage of a flat amount is that siblings all get the same allowance, which may make life simpler.
What you expect your children to do with this money will also help determine the amount. Some families require that part of each allowance goes toward savings - children enjoy going to the bank and taking their collection of dollars and coins to deposit, so they have a sense of ownership in the process. Some families have kids set aside a portion of allowance for charity - church, or a cause that's important to the child. Other parents expect (from older kids) that allowances will pay for all clothing purchases - in this case, obviously, the weekly amount needs to be significantly higher.
Finally, there's the issue of tying money to chores. This practice promotes the idea that money must be earned. The opposing argument is that the chores will then cease to have any intrinsic value; a child won't clean his room because he values a clean room, he'll just clean it to get his allowance. If allowances and chores aren't connected, the chores can still be required, they just aren't tied to the receipt of money.
For children who are too young for allowances, counting pennies or "playing store" are great introductions to money, and making change together is a good way to incorporate early basic math skills.
Your assignment: Think of one activity this week that will teach your children more about money. If your child is under 3, you get a pass on this - but this would be a great time to revisit one of the previous "Mom" topics and choose an assignment that better fits your family.
Ready to take the assignment? Want to talk about this? Share your ideas and thoughts at M.O.M. Balance forum.
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