It’s never too early to start learning about money 

If children are old enough to receive an allowance, they are old enough to learn about how to handle it properly.  Conversation about what they intend to do with their allowance is imperative.  Talking to children about money is extremely important.  It’s sad to see, in the world of today, that young adults haven’t a clue about how to handle money or even the basics of it.  Immediate gratification seems to sadly be the norm.  And most don’t give a thought to the bill that comes due at month’s end.  A sad, and bad habit to get into.

Hopefully, each child is given age appropriate chores to earn an allowance.  Let them learn right away that they work hard for their money, that it doesn’t come easy.  Realizing this, they’ll be less likely to waste it.  Keeping their room clean, is not a chore…they should keep it clean.

• Teach them that they should save some — maybe 1/3.   Take them to the bank and open a custodial savings account –  your name and theirs.  Let them fill out the deposit slip themselves, taking part in the process, so they can actually see for themselves how the savings system works…. they can ‘watch’ their money grow.
• The second 1/3 can be for saving for something particular they’d like, say a new device.  This teaches that they have to wait for some things.  They should also put aside a part of this 1/3 for family gifts, birthday, holiday.  Even giving a gift that costs $1. is, for them, a gift from their heart.  They worked for, spent their own earned money to do this… a good feeling.
• The last 1/3 they can spend on themselves, for something they’d like or like to do.

This will teach them to ‘live within their means’. if they don’t have the money, they can’t buy the item.  They may even find they no longer want the item when they do have the money.  Another lesson learned.

They will learn to budget. They’ll learn how to prioritize. They’ll learn discipline.