Heart To Heart Parenting:
Prevention Parenting Series

Kids and Money:
Nurturing Responsibility

By Anne Leedom

Allowances form the beginnings for most kids in learning to deal with money. Its critical the allowance is set up as an ongoing process for earning money, not a method to demonstrate love or to reward kids for actions that are naturally expected in a family unit. Here are some guidelines offered by leading experts to help teach kids how to handle money on a day-to-day basis.

1. Don’t wait until college to start
   Experts say most 4 year-olds are ready and eager to learn about money and how things are bought and sold. You can start to educate your child by having them hand the clerk the money when you make a purchase or look for the purchase amount on the product. By the time they are six, a regular weekly allowance can begin. At the age of seven, most kids can be competent at handling small amounts of money in the from of an allowance, and special monies earned for specific chores, which are not part of their normal chore routine.
   
   
2. Establish guidelines
   Each child should understand why she is receiving an allowance and what expenditures it's intended to cover. If you've decided to pay an allowance to your children because they are members of the family explain this philosophy to them. Remind them of the general responsibilities they have as members of the family for which they do not receive an allowance. In deciding guidelines for giving allowances, here are some tips:
   
   • Allowances should be a set amount given every week as a way to share in the family resources. The amount should not relate to specific and regular work done in the home.
   • Additional funds can be given for special chores.
   • When the allowance is first given, construct a list of chores. Present the list as something the child now will be expected to do regularly as a member of the family and in return, they receive weekly funds so they can share in the family resources. The allowance is not directly traded for specific chores.
   • Make up a chore list and let your child choose which chores he would like to take on. You decide the number of chores, and he or she chooses which chores.
   • Praise your child regularly with hugs and kisses for staying on track.
   • Do not pay children for good grades.
   • Do not pay children for doing their homework.
   • Increase their allowance as they age and their needs change.
   • Offer to share the expense of more costly items…don’t make their spending and saving goals too far out of their reach.
     
     
3. Pay regularly
   Paying on schedule will teach your children the value of honoring one's agreements. Pick one day and pay them the same day each week.
   
   
4. Do not use an allowance as leverage
   Set up rules about how and when the allowance is to be given and stick to them. Don’t threaten to take it away as punishment
   
   
5. Accountability
   Design a system for how the money will be used. Many experts favor the 40/30/30 rule. Forty percent of the money goes into savings, thirty percent goes into charitable funds and the other thirty percent can be spent as they please. Don’t oversee each expenditure they make, just set up a general guideline and then follow up on their progress periodically.
   
   

Activities

Chore jar - Fill a clear jar with chores and when kids want extra money, let them pick a chore from the jar.

Chore Calendar - Have fun taking turns assigning each other different chores to do each week on specific days.

Bonus Chores - Design a list of fun activities for a child who chooses to do bonus chores, also listed on this chart.

Treasure Hunt - Make games out of finding out your daily bonus chore…hide it in the cookie jar, or some other unusual place.

Mission Impossible - Make a weekly tape to your child of his “Mission Impossible” chores for the week

It’s crucial to help kids see earning an allowance, saving and spending as a positive experience. It can be a great virtue booster to teach responsibility, accountability and other virtues like generosity and caring for others. Money is a tool, and if used wisely and respectfully can enhance even a young child’s life. There are many great books available offering activities and tips to nurture the valuable trait in kids.




Anne Leedom is the editor and publisher of www.parentingbookmark.com and www.moralintelligence.com. She lives in Northern California with her husband and two daughters.


For more information on character education for kids visit www.parentingbookmark.com copyright 2001.

For permission to reprint, contact editor@parentingbookmark.com