How to Give Money to My Child

When your child starts asking for money to buy things, it's time to teach her how to manage her own money.

Children have reached the age when they should learn money management when they understand how to ask for money. Teach your child how to budget when she is young; you do not want to end up with a teenager with credit card debt. Deal with your grownup child's budget problems by preventing them. You can give your child a weekly budget from your income to include her in the shopping process. Follow a few tips to begin teaching your child about money management.

Instructions

1. Establish an agreement between you and your child regarding allowance. For instance, figure out whether you plan to make your child do chores to earn an allowance. You might want the child's allowance and her chores not to be related.

2. Plan a chore schedule. Your child should understand that chores are part of her responsibilities, even if she does not get paid to do them. In addition, if your child receives payment that is contingent on the amount of chores she performs, she must also know that chores are necessary even if she does not want to spend money each week.

3. Set the amount of allowance you plan to give your child. Some, such as Kids' Money contributing author Caryl Horan, recommend giving a dollar for each year of your child's age. On the other hand, you can simply give a preschooler a couple dollars to teach her responsibility and help her learn not to lose her money.

4. Stick with the rules you have. If your child must do her list of chores each week before getting paid, insist that all of the chores are completed with care. In addition, you may want to withhold payment if your child does not complete her chores.

5. Include your child in the budgeting process by making a list of the things she should pay for each month. As an example, you may want your child to pay for her clothes and snacks. Decide whether the allowance should go toward your child's extracurricular activities.

Tips & Warnings

• Give your child enough money to cover everything that she needs in the budget you give her.

• You do not want to give your child too much money. Your child should understand that she may have to make sacrifices to work with her budget.

References

• Kids Money: "Give 'em Allowance"
• Kids Money: Money Management Starts with Allowance
• Money Central: Should Your Kids Get an Allowance?