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Well, now we are going to talk about teaching children money management skills, it's kind of an important one. Allowances are a really good way to start because it gives them a sense of something to look forward to, if they have chores as young children, of course they are going to be very easy chores like pick up your room, here is your allowance, they can either spend it as they make it at first, or they can save it. Some kids are savers and some like to spend them.
My son is a spender and he is always going, "Mom, can I have some money please?" and I am saying, yeah, but you are going to have do some chores for it. I am trying as he gets older to give him more and more responsibilities and when I do -- when he does need money I try to remind him that he has got to do something to work for that money and I hold them to it so that if he asks me for money again and he hasn't yet performed that chore I say, "Honey, you know what, you promised you were going to clean my car, my car is still not cleaned. So once you clean my car I will be happy to give you more money."
It's important to help them open a bank account and explain to them that if they keep money in their bank account that they will accrue interest and that interest will be their money, it's free money for them. The more money they put in the more interest they are going to make. It's also important when they start to get little jobs on the side to help them learn how to budget. They should keep some kind of a record of how much money they make, how many hours they have put in , the amount of money they have made and what they have spent. It's a good idea to try to convince them but it doesn't always work to put some percentage of that money aside in a savings account where they are not going to touch it so that they can see their money grow and spent it on something that is worth a lot to them like a video game or a camera or some day they will maybe save up for a car.
Money management is a really important skill and the sooner they learn that the better you will all be.
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