Independent
Means

 

October
Kids and Allowances


1. An allowance is not a salary or an entitlement. It is a tool for teaching children how to manage money.

2. There is no right amount. Rule of thumb is to start small and increase the allowance as the child's ability to manage responsibility increases.

3. Manage your child's allowance in the context of your goals. Are you trying to teach budgeting skills? Are you hoping to encourage independence? Decide what lessons you want to instill and then build the allowance around those lessons.

4. Do not use the allowance for behavioral control. Money anxieties are deeply embedded in our psyches. Connecting an allowance to emotional or behavioral control exacerbates this and doesn't do much to help the child develop healthy financial habits.

* RFFK Tips are excerpted from 'Raising Financially Fit Kids' (2003) by Joline Godfrey. Please visit www.raisingfinanciallyfitkids.com or www.independentmeans.com for more information.

© 2007, Independent Means

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Some people think they are worth a lot of money just because they have it. - Fannie Hurst

Independent Means, Inc. sets the standard for innovative resources for Raising Financially Fit Kids. Your kids are developing views on money through your actions! This month, make a note to talk about hidden costs - the price of that trip or the car or club membership that DOESN'T show up on the price tag. Source: www.independentmeans.com

 



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