Allowance for Kids | Should You Pay It

Do You Know What’s the Most Important Factor In An Allowance for Kids?

Is an allowance for kids a wise thing to do?What do you think about paying an allowance for kids as a method of teaching them about money? There are many opinions on this subject and who is to say which one is best?

Some present arguments saying an allowance for children is one of the best ways to teach him/her to be financially responsible. Others, however, present evidence that is just as convincing to the contrary. Both sides do agree that paying an allowance for kids will only work if the child is old enough to count money.

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Student Loan Debt – Be Careful

Student Loan Debt Horrors

Student loan debtCollege tuition and related costs have skyrocketed over the past decade.  This is causing many students to struggle with a large amount of student loan debt when they graduate.

In 2013, the average student loan debt was roughly $33,000.00.  The shocking part is that this figure is 70% higher than it was 9 years ago!  In total,the number of students that apply for student loans almost tripled to over $950 billion.  If you are worried by the mounting college debt, this is an article that may be of importance to you.

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Counting Money Games

Counting Money Games

Counting money games

If you have read the other articles on my blog, you know how much I advocate children learning early money management skills.  The earlier children learn about money, the better.  Small children can begin with counting money games. Children who learn counting money games and practice early money management skills benefit in the following ways:

  • They never develop poor spending and savings habits that lead to debt later in life.
  • They are taught an early sense of responsibility and make wiser choices.
  • They avoid the negative connotations of money and rarely have a financial lack mentality.
  • The current mentality in our society about living above your financial means and having a lot of debt will not be carried forward with this generation of children.

Reason number 4 is very important and affects us all.  We can bemoan our current society’s spending habits but until we make the changes that bring about a new way of doing things, we are wasting our breath.  Complaining about something is worthless unless we are backing it up with action.  Teaching our children from the ages of 2 or 3 with counting money games brings about a change in their mentality.  Pushing for early money management programs in our schools are equally important.  Again, we should not wait for someone else to do what we can do, so teach your children financial responsibility and don’t wait for a school system to get on board before you do. Children learn best by seeing and doing something, instead of just memorizing.  Here are some ways to teach counting money games to children:

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Counting Money Games

Counting Money Games To Teach Children About Money

Counting money gamesIf you have read the other articles on my blog, you know how much I advocate children learning early money management skills.  The earlier children learn about money, the better.  Small children can begin with counting money games.

Children who learn counting money games and practice early money management skills benefit in the following ways:

  1.        They never develop poor spending and savings habits that lead to debt later in life.
  2.        They are taught an early sense of responsibility and make wiser choices.
  3.        They avoid the negative connotations of money and rarely have a financial lack mentality.
  4.        The current mentality in our society about living above your financial means and having a lot of debt will not be carried forward with this generation of children.

Reason number 4 is very important and affects us all.  We can bemoan our current society’s spending habits but until we make the changes that bring about a new way of doing things, we are wasting our breath.  Complaining about something is worthless unless we are backing it up with action.  Teaching our children from the ages of 2 or 3 with counting money games brings about a change in their mentality.  Pushing for early money management programs in our schools are equally important.  Again, we should not wait for someone else to do what we can do, so teach your children financial responsibility and don’t wait for a school system to get on board before you do.

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How To Teach Kids About Money

How to Teach Kids About Money – Get Ideas That Really Work

How to teach kids about moneyThere comes a time when parents with children begin to read books and decide how to teach kids about money. This is not just one simple conversation that you have with your child, but is an ongoing process.

There is no one “book” to teach from and there is no universal method that will fit every child. You’re dealing with different personalities, comprehension levels, as well as the ability to learn.

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Money Games for Kids – A Learning Tool

Fun Money Games for Kids

Money games for kidsThe best ways to engage kids in learning is to make it fun, and this is why money games for kids can be very successful. Kids are no different than adults.  They lose interest, their mind wanders, and they become sleepy when lectures are boring and without much interaction.  Many alternative schools have learned the value of the importance of child participation and making learning fun.  Even though education is serious business that does not mean it has to be boring and stuffy.

Boring and stuffy; that is how many people feel about money management.  What if you grew up learning about money in a fun way?  Then when you began to learn money management skills at an early age, dealing with money later on never became a boring chore.  This is how we should be teaching children.  Children should be excited about money so they grow up into adults excited about dealing with money.

This article is dedicated to fun money games for kids.  Kids can begin using money in counting games as early as 3 and 4 years old.  This starts them off early and gets them headed in the right direction.

Fun Money Games for Kids –ages 5-10

A glass jar game.  Have your child pick a toy they want and write down the cost of the toy next to their glass jar.  Tell them they will receive coins in exchange for small jobs. View full post…

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How To Teach Children About Money

How to Teach Children About Money – Be Sure to Start Early

How to teach children about moneyThere are many opinions both pro and con regarding the issue of how to teach children about money. Many experts in child education recommend that you pay them an allowance and feel that by doing so, you will help to teach then to be financially responsible.

Another opinion from child development experts that appears to be just as strong, makes their case by stating that just the opposite is true. Now that we as parents are confused, and quite frankly don’t know who to believe, what do we do?

We can’t say who is right or wrong, because we as parents have an opinion as well, that may have been influenced by our upbringing.  For the purpose of this article, we will present the opinion of the pro-allowance group and in a future article, those in opposition.

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Teaching Kids About Money

What Teaching Kids About Money Is All About

Teaching kids about moneyIt’s quite evident that teaching kids about money as well as the importance and need for money, should be done as they observe their parents using it. One of the best methods to teach a child about money and the value of a dollar is to show them the different ways a dollar is used, and it’s a good idea to begin when they’re young. Many understand a lot more than you realize.

Not only should we be teaching kids about money, but more importantly, they need to understand that money is earned, and not simply given for whatever reason. Items that we need in every day life, whether they be a product or a service, are exchanged for money, with the value of the exchange determined by the seller or provider. The only way that a product or service can be purchased without money, is to exchange some other product or service for it, and this is known as bartering. This is not to common here in the USA, but in some parts of the world, it is more prevalent.

Teaching kids about money should include the importance of saving. They can take their allowance and spend it all on candy or some cheap toy, but then it is gone quickly. They need to be taught that by saving a certain part of their allowance, one day they will be able to buy a more expensive item such as a bicycle that will last much longer.

Have them establish a savings plan such as 10% of their allowance which will be much easier for them to calculate. Whatever amount that they earn can be calculated simply by moving the decimal point one space to the left. The savings account isn’t used for some short term item, but is used for the longer term items. Even though the amounts saved by the child now are very small, it will teach them the importance and value of self discipline. When teaching kids about money, such as saving for retirement, at an early age might not be a good idea because this may be a concept they can’t fully comprehend.

Teaching kids about money at an early age is good because by the time they get their first job, they will find it easier to continue with those principles. Another part of money management is to teach children about charitable giving, in order to make them a responsible member of society.

It used to be that you could take your child to the bank and open a savings account with around $10.00. In today’s economic environment, banks won’t generally open accounts with small balances, as their service charges will take it all rather quickly. Some banks service charge savings accounts until the balance reaches $1,000.00, but check around, you may find a credit union that is a lot more generous and responsive, and more receptive to teaching kids about money.

It used to be as well, that banks paid a decent rate of interest on savings accounts and you could show your child that as a benefit of saving, he/she would receive additional money. Now, with savings rates below 1%, there’s not much to see unless the account balance is substantial.

The next area of good money management when teaching kids about money, is the use of credit cards. This is one area where interest rates are not low, and in many cases, well over 20%. The child should be able to understand just how much a purchase would cost if it is not paid in full when the first statement arrives. It’s very easy to see those large monthly charges, and if the balance gets high enough, by simply paying the minimum payment called for, it will never get paid in full. Teach them this trap until they completely understand it.

In my opinion, credit cards should only be used as a convenience to purchase and then paid in full when the statement arrives. In my practice, I see young couples with seven to ten credit cards all maxed out to the tune of $50,000.00 plus, and they wonder why they have marital problems. Trying to keep up with their friends or neighbors with the over sized house, big SUVs, and all the latest toys, usually leads them to a divorce lawyer or a bankruptcy lawyer, sometimes both. I believe that teaching kids about money early on, will avoid some of these problems.

Most of the blame can be placed on the credit card issuers who mail out cards to anyone who is breathing, with little regard to their credit ability. Individuals see the amount of credit granted, and the temptation is too much. They begin spending on their wants and not their needs, and are soon in trouble. Teaching kids about money in a way that they will learn to exercise extreme caution with credit cards is critical. They need to learn to keep just one for the convenience of not having to carry large amounts of cash.

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