Kids and Money

If you have kids in school, you know they’re (hopefully) learning subjects like English, Math and Science in school – but what about money management?

In most cases, especially with younger children, that kind of training is up to you, the parent – and it’s obviously an important skill they’ll need later in life. That’s why giving them an allowance in return for doing simple chores like taking out the trash can be a valuable system to implement in your household.

Most experts agree that the younger you teach kids how to manage money, even small amounts, the better off they’ll be as adults. And the only way they can really learn is to have the experience of working for money, and controlling their spending so they can save for what they want.

"Giving your kids an allowance is the best money-management tool you can use with your children," says Janet Bodnar, the deputy editor at Kiplinger's Personal Finance. "When it's their money on the line, children make more-informed purchasing decisions."

And it’s important for them to see that money is earned by their efforts. Meridee Maynard, a financial literacy educator for Northwestern Mutual in Milwaukee, says, "Part of the idea with an allowance is to make sure you reinforce that in order to earn money, you have to do certain things."

Many grown-ups who were never given the chance to hone their money management skills as children grow up to ring up credit card debt without much thought.   Giving your kids these skills now might help that from happening to them.

Plus, it saves you from taking out the trash!