Financial Facts of Life
It’s almost never to early to being teach kids about money. And it’s never too late!
The main indicators of when your child may be ready for allowance are her emotional maturity and cognitive level. The decision also depends on what you want allowance to accomplish. Your child will provide you with plenty of clues. You will know they’re able to learn something from allowance when they:
- Become aware of the relationship between money and shopping (which generally begins at about age 3)
- Can differentiate between different coins
- Are able to count, add, and subtract
- Have opportunities for spending
- Begin asking you to buy them stuff when you shop
Don’t confuse a child’s interest in money with his readiness to appreciate its value. The jingle of shiny coins can be very appealing to youngsters well before they may be ready to learn about saving and spending. Susan recalls that when her son was 5 years old, “he loved collecting money but had no concept of its value.” She had not yet started him on a regular allowance, but “oftentimes he would ask if he could have the change in my pocket or at the register. He just loved collecting things.”
By around 7 or 8, depending on the child, allowance can help teach children the meaning of money, how to use it, and how to plan. If your kids are older—even in their teens—and you haven’t got them on allowance, don’t worry. It’s never too late to start.
The ebook, Kids and Money Guide to Smart Spending will help you guide preteens, teens, and young adult children to understand and embrace techniques for reining in any tendencies toward constant consumption, by understanding the cost of cool. It will also help you teach them about one of the topics they most often report they do not understand, which also happens to be one of the more serious traps many fall into: credit card debt.