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Allow an Allowance

Sandra McKinnon, MS
Family Financial Education Specialist

            How did you learn about managing money? Did you just pick it up along the way? Did you learn all that you needed to know?
            Children learn about money by watching others. What they see and hear influences the values and attitudes they develop. Set a good example for children. If you earn, spend and save wisely, your children are more likely to be money smart as well. Children need to be involved with money Ė in family discussions and decisions, and through hands-on activities. Money concepts can be confusing so adults should talk to children about family finances.
            Just like when learning to ride a bike, exposing a child to the idea isnít enough; they need opportunities to practice. Allow an allowance.
            Many experts agree, allowances should not be tied to chores or given as a reward for good behavior, good grades or other achievements. An allowance is a specific amount of money given to a child on a regular basis. The allowance helps children learn how much things cost and how to set goals and priorities.
             The amount of an allowance should be reasonable considering family circumstances, the age and ability of the child, and what an allowance is to cover. Children at the age of 4 or 5 are ready to begin learning how to manage money. Allowances are generally used to cover spending, saving, and sharing plus gives children some money to spend however they wish.  Making mistakes is part of learning, so donít hesitate to let children make choices about how money is used. Donít bail them out though if they lose their money or go on a spending spree.
            Remember practice, patience and praise.

Resource: Money Wise: Helping Children Learn to Manage Money by Doris K. Walker, Kansas State University Extension.

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