Teaching children children the basics of an allowance is a great way to introduce them to money management and financial responsibility. Here’s how you can approach it at different development stages:
Age 3-5:
Concept: an allowance is a small amount of money that they can use to buy something they want. Language: Introduce them to the idea of saving for something they really want. Example:
“Do you remember that toy we saw in the store you really liked? If we save some of your allowance each week, you’ll have enough to buy it soon!”
Age 6-11:
Concept: earning allowance through chores. Language: Give lessons on budgeting and the difference between needs and wants. Example:
“You’re old enough now to help out with chores aroudn the house. When you help, you earn an allowance. This money is for you to save or spend. Remember, we need to think carefully about our purchases.”
Age 12-14:
Concept: understanding how to use your money. Language: Define the different ways to use money, such as saving, spending, and giving. Include the idea of saving for long-term goals. Example:
“Think about how you want to use your allowance. You could spend it now, save some for something big you want later, or even donate some to a cause you care about.”
Age 15-18:
Concept: understanding more complex financial concepts. Language: Encourage them to save a portion of their allowance for specific goals, like a car or college. Example:
“As you’re getting older, it’s a good idea to start saving for bigger things, like a car or future education. Let’s talk about how you can use your allowance to start saving towards these goals.”
Practical tips for parents:
- It’s important to be consistent and clear about expectations.
- Allow children to make decisions, and learn from those decisions.