We haven’t had the allowance conversation come up yet , but I thin k it ‘s quite overdue in our home. “Money Mama” Lori Mackey from Prosperity4kids shares some great tips on how to determine how much allowance to give your kids.
- Allowance is a great learning tool, and can be used to create positive habits, break bad habits, and teach your child how to become a wise consumer.
- Don’t think of it as – Paying Your Kids- think of it as – Teaching your Kids how money works.
- Allowance should be based on your disposable income, not age, ranking or what the neighbor pays.
- Take what you are spending on each child already and transfer the earning power to your child. It won’t cost you anymore than you are already spending, but the financial lessons will be priceless.
- Assign chores that your child is not currently doing. Start out small and work up to bigger. Small successes lead will lead to big rewards for both of you.
- The most important lesson you can teach about debt is to never spend 100% of what you have. Follow the 10/10/10/70 method: 10% goes to savings, 10% to investing, 10% to giving, and 70% left for spending.
Money Mama also has several resourceful products available to help your kids learn about money and saving.
Do you give your kids allowance? How do you determine the amount?
photo: Digital Sextant