Weekly allowance helps kids become responsible with money

Experts encourage parents to give children a weekly allowance and help them decide how much they should spend, save, donate, and invest. This will help them understand not only how much things cost, but also gives them early lessons on financial terminology. Dividing up money also helps your children practice basic math skills such as addition, subtraction, and division.

The economic downturn took a toll on so many people, especially those who did not previously have to budget. Without the proper training on how to manage and save money, it can be easy to fall into debt. That is why most parents (62% according to a CBS Money Watch news report) give their children allowances to help prepare them for responsible saving and spending.

Experts encourage parents to give children a weekly allowance and help them decide how much they should spend, save, donate, and invest. This will help them understand not only how much things cost, but also gives them early lessons on financial terminology. Dividing up money also helps your children practice basic math skills such as addition, subtraction, and division.

The report also hosted family finance expert, Erica Sandberg, who maintains that allowance should not be tied in with chores. “Chores are a child’s responsibility as a member of the family.” If you expect your children to dust their rooms or take out the garbage on certain nights, then they should not be paid for tasks they are expected to do. It is also important, however, to offer additional chances to earn money. If the windowsills need to be painted or if the garden needs aggressive weeding, you should offer those jobs to the children with pay incentive.

According to CBS news, the average weekly allowance is $12. Sites like www.smartpiggybank.com aid parents in teaching their children how to handle the responsibility of weekly allowance. Smart Piggy Bank tracks transactions, interest, and savings online, letting parents act as the role of “bankers.” Parents can create usernames for all of their children and work with them to show them how to best understand their money. It is also a safe way for parents with minors to monitor how they are spending their weekly cash.