- Don’t treat a 10-year-old like a 16-year-old
If you set money rules, make sure they’re age appropriate. Some guidelines: As young children grow, they start to grasp the value of money and the concept of saving. By the time they are at junior secondary school, children understand that the clothes and games they covet can cost a lot. And as they get into the teen years, kids have a much better grasp of how much stuff costs and are capable of understanding quite a bit about money if they are actively taught how to manage it.
- 61% of parents give an allowance. Will you?
Will you join the 61 per cent of parents who give their kids regular allowances? Will you be like the 48 per cent of parents who pay for good grades, according to a 2012 study?
There is no right or wrong approach, but it is helpful to let your children know your philosophy and expectations.
- Make them work for it? Not so fast
Many families find it helpful to have a rule about chores. According to a survey, some parents require their children to earn their allowance and work at least one hour a week. Some financial experts, however, say an allowance is a learning tool and should not be tied to chores; children should do chores simply because they are members of the household.
- Their money, but your call
For young children, the list of expenses typically includes discretionary items, such as toys and apps, while junior secondary schoolers are mature enough to take on more responsibility. By the teen years, kids have expenses such as hobbies and sports. Some parents may choose to ask teens to be responsible for entertainment, while parents pay for the after-school activities. Or teens can pay a percentage of all of their expenses.
- Let them watch their money grow
Fifty-four percent of families require children to save at least part of their allowances, according to Consolidated Credit Counselling Services. Whether or not you give an allowance, saving can be an important lesson for children and help them learn delayed gratification. Parents can ask elementary schoolers to regularly set aside money for a coveted toy. Experts also recommend that both elementary and middle-school-age kids set savings goals and write them down as a reminder. In high school, some teens are ready to start saving for multiple goals, including longer-term expenses such as college.