Here on the Straight Talk blog, we often talk about the importance of teaching your children about money. We know that doing so can be difficult; after all, many adults are still mastering the art of fiscal responsibility, which can make it difficult for them to pass lessons on to their kids. And even if you’re a savvy saver, you may not know where to start when it comes to teaching your children about your strategies.
Trent at The Simple Dollar recently shared how he teaches his young children about money. It’s a method you may want to try with your own child. He suggests dividing your children’s allowance into four categories:
1. Spending. Allow them to spend this money on anything they want – mp3s, video games or toys.
2. Saving. This part of their allowance should be put away for a bigger future purchase, like a gaming system or a tropical fish.
4. Giving. Giving back is an important part of responsible money management. Help your children choose a charity to donate to from their allowance on a regular basis.
By covering all of these bases, you’re teaching your kids all about the most important angles of money management. You may find that putting the cash into separate containers helps you illustrate these concepts to your children. Plus, as we all know, there’s nothing better than watching your savings grow.
Do you manage what your children do with their allowance? What percentage of their money do they put into each category?