Allowance is one of the best tools for teaching your child
the value of money. It can create good habits, break bad habits and change
behavior. Don’t think of allowance as “Paying Your Kids” -- think of allowance
as a tool for teaching financial literacy and an introduction to the wonderful
world of money.
Children can start earning an allowance as soon as they know
money gets them what they want. This depends on the personality of your child
-- if at age 2 he wants anything and everything in sight, then it's time for
some money lessons. If your child has little or no interest in wanting
everything they see, then they are not quite ready for the fundamentals of
allowance.
The amount you pay a child depends on the family income, not
age or ranking. Think back to all of the things you bought your child in the
last month that was not a necessity. Add up things like candy, videos, toys,
CDs, trinkets and other extras. This will be the amount you should allow your
child to earn throughout the month. It won't cost you any more money and may
even save you some money in the long run.
Next, sit with your child and explain that they are going to
start earning an allowance for certain chores, and from now on they are going
to use their own earned income to buy the items that you used to buy for them.
Allow your kids to earn money for anything that they are not
doing right now! If your child is not making their bed, brushing their teeth,
or cleaning their room, start with that. Experts say it takes 21 days to create
a habit. Once your child gets in the habit of doing those chores automatically,
you can stop paying for the previous chores and move on to other things like
cleaning the bathroom, laundry, etc.
The next time you are going out into the market place,
remind your child to bring their money. Now they will purchase the items you
used to buy for them. You will probably find that your child will make better
choices with their money versus your money and will probably think twice before
letting go of their cash. If they find something they want, encourage them to
do some research to find the best price. I always have my children visit
Kijiji.com, which is a free, family-friendly, classified website. Your child
will start to see that sites like these are full of items they might want, but
they will also see this as another way to earn money by selling items that they
have no use for anymore.
You can help your child understand that there are several
ways to earn money besides allowance and open their eyes to the wonderful world
of money. To receive our free guide on The Smarter Way to Pay an Allowance
visit Prosperity4Kids.com.
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