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  • Writer's pictureThe PB Scoop

Four Ways to Raise Financially Responsible Kids

Allowances are a great tool when used properly to teach kids how to manage money. Its critical to set allowances up as an ongoing process for earning money, not as a method to demonstrate love or to reward kids for actions that are naturally expected in a family unit. Here are some guidelines to help you teach your 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. Start to educate your child by having them hand the clerk the money when you make a purchase, or to look for the purchase amount on the product. By the time they are six, a regular weekly allowance can begin. 2. Establish clear guidelines Each child should understand why an allowance is given and what expenditures it’s intended to cover. If you’ve decided to pay an allowance to your children simply 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. Allowances should be a set amount given every week as a way to share in the family resources and not be related to everyday chores. 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. 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 every 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. Every member of the family can participate and trade chores.

It’s crucial to help kids see earning an allowance, and then saving and spending that money 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.


Anne Leedom writes regularly for national online and print publications. Anne is the Founder and Editor-in-Chief of, a national parenting website. Anne is also the Founder of Net Connect Publicity, an premier Expert Publicity Agency. She lives in Northern California.

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