Friday, October 3, 2008

No Kidding with Money!

A good number of parents believe that kids should preferably abstain from spending money in all accounts. And I believe they do have a point. Once you are habituated with spending money to fulfill your small desires, you urge for more. While adults are mature enough to understand, the kids get puzzled and sometimes go overboard to get money at any cost. But if the matter is handled with a little more caution, kids can be educated with the usage of money and learn to spend it wisely in later years.

Cute Rewards:

It can also be thought on whether allowances should be conditioned on performing chores, there’s value in doing work and being rewarded for it and it's good training for getting a job. A child should be required to contribute time and effort to help with the family work load. This process shouldn’t be continued endlessly as a child may take this to be an easy way of earning few quick bucks. A child may think that all jobs around the house should be monetarily compensated can cause endless friction on the home front.

Realizing small Goals:

Nothing really motivates a child in saving money like a wish list. A wish list is a way of putting down financial goals on paper and this would motivate your child in saving more for acquiring something really valuable. Your child can learn to become a more determined saver by deciding what they are saving for.

Length of time:

Review your child's allowance once a year to keep it in line with changing needs and costs. Gradually give your child a larger allowance and a freer rein on spending. The early teens are a good time to switch from a weekly allowance to a monthly one so your child will learn to budget money over longer periods of time. You should gradually increase the allowance to cover most, or all, of the clothing costs and entertainment expenses. In that way, your child learns to handle money in a more sensible way and you wouldn’t have to worry about its frivolous usage.


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