Children and Allowances and Alternatives
How money was handled in your family when you were a child will greatly affect how you handle money with your children. This is Jan Gilman, Extension Educator with the University of Minnesota Extension.
It’s very important for parents to use a consistent approach to giving their children money and how they teach them about the five concept of money management: earning, spending, sharing, saving and borrowing money.
There are four main ways children receive money – allowances, the dole, cash gifts, and earnings.
Each of these ways has advantages and disadvantages to consider.
Allowance teaches basic money management, promotes independence, encourages communication and provides the practice of living on a regular income.
Allowances can promote a sense of responsibility, teach the value of money and create and encourage planning and goal setting.
If you’d like more information about teaching children personal finance through allowances and alternatives, visit the University of Minnesota Extension Youth and Money web site at, http://www.extension.umn.edu/youth&money.