Allowances can help boost your kids financial sharpness
In an effort to boost on her kids financial awareness and sharpness, Robin Taub paid her two kids on a weekly basis. Presently, they are both in college and are admired by their friends for being financially aware and savvy. They are quite able to manage their finances and in Taub’s book “A Parent’s Guide to Raising Money-Smart Kids,” she explains how essential it is for parents to improve on their kids ability to have a positive money habits.
At a time when Canada is going through significant debt ratios, it can be of good use for kids to learn how to manage their resources.
According to Taub, kids need to learn about financial management at an early age when the mistakes they make do not have serious implications.
Taub, a chartered accountant suggests at every year of a child’s age, parents should give them one dollar every week.
One existing argument for parents is whether the money should be given after kids perform home chores but for Taub kids should carry out chores because they want to assist in the home and not motivated because of the money they will get at the end of it.
Teresa Casciololi, author of the children’s book series, “M is for Money” disagrees with this saying in the real world, one does not get money for doing nothing. Alternatively, kids can be given the money for doing extra working at home, making children to be inventive on what they can do to get the incentive.
However, both women are on the same page that the age of 5 is quite appropriate for allowances to commence.
Giving kids money at an early age helps them to distinguish money and also know the value of money. As they grow, parent can increase the way they introduce their kids to other financial transactions such as debit cards and online banking. They can also open a bank account for them to teach them to start saving.
Additionally, kids should also be taught that the money giver them should not be used freely. They should be taught how the money is to be used of different purposes. They should also be taught on financial confidentiality which should not be disclosed to friends in school.