Let parents bequeath to their children not riches, but the spirit of reverence. —Plato
Plato said it well. Parents are not just responsible for providing food, clothing, and shelter for their kids. They are also responsible for teaching their kids about life—and life includes handling money.
When it comes to kids and money, the three most common questions I get are:
- When should I start teaching my kids about money?
- Should I give my kids an allowance?
- When should my kids go to work?
Teach kids about money as young as pre-school age and no later than third grade. Just think about it: if your kids can grasp this money stuff early on, they'll avoid many of the pitfalls later. After all, its better for little Billy to make a $10 mistake than a $10,000 mistake!
Start paying them a commission for chores they do around the house.
Typically, one dollar per completed chore is sufficient with a list of five or six chores each week. Remember that each child is going to respond differently. Just keep evaluating your child's maturity level and make sure their chores are age-appropriate.
Do not give them an allowance.
After all, what are you making an allowance for? You don't want to have the kind of kids who think money grows on trees, do you? Don't set them up for frustration and unrealistic expectations. And don't miss out on the teachable moments that come when you give them a commission instead of an allowance.
Send them off to work.
Child abuse is letting a kid sit in front of a TV all day playing video games and eating junk food. Kids need to understand what a little dirt under the fingernails means. Delivering newspapers, mowing lawns, or working at a concession stand are some appropriate jobs they can handle.
Guiding your children in the choices they make with money is HUGE! The lessons you teach them as they earn money and learn to spend, save and give will lay an influential foundation for their lives. Remember, if you don't teach your kids how to handle money, someone else will.
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