Giving Your Child an Allowance

Should You Give Kids an Allowance?Giving Your Child an Allowance

Is anything in the world of finance and parenting more debated than this – should you give your kid an allowance? Will it turn them into lifelong moochers or teach them valuable budgeting skills. In the Rich Mama’s humble opinion an allowance is a good tool for younger kids, when used as a way to regulate the “I want that’s…” Since children this small really do have a hard time doing jobs to earn money, an allowance can be a great way for them to learn to save up for that pack of gum or special toy.

According to some financial experts, giving your child an allowance is one of the best ways to instill solid financial skills in their young brains. Compared with a “pay as you go” policy, where you pay for what your child wants when he or she wants it, a weekly allowance can help your child better understand that money must be earned before it can be spent. This is a lesson your child certainly needs as an adult.

In addition, older kids are more influenced by their peers, especially where spending habits are concerned. Don’t forget you also have to contend with television commercials, radio ads, and other forms of media selling, selling, and selling. Managing an allowance at a young age will help your child more quickly grow accustomed to spending limits and restrictions.

What’s important if you’re going to give an allowance is to discuss what’s covered by the allowance. In other words you might not expect your kids to pay for their whole back to school wardrobe with their allowance, but if they want to go to the movies with friends, this might be an allowance item. Just make sure you and your partner sit down and discuss what you think you should be paying for versus what your kids should pay for with their allowance.  And then when you and your spouse are on the same page, then go start to negotiate with your kids.

Chores, Smores

With older kids, there are some families who have them do chores in exchange for an allowance. On the one hand this teaches the principle of now worky…no pay-ey…On the other hand moms and dads do a lot of crap around the house without any expectation of allowance, and if you’re teaching your kids that if they make their bed and get a dollar, then what happens when they’re on their own – and no one is giving them a dollar.

With older kids I favor the approach of chores that need to get done no matter what, plus a base allowance, plus an opportunity for kids to earn money doing extra jobs around the house. For instance if there is a job you would outsource, then consider paying your child for it. It could even be cooking a meal a week if it stops you from ordering takeout.

 

How Much is Too Much

So, how much allowance should you give your child? You can determine the amount in a variety of ways. Some parents and financial experts suggest one dollar for every year of age. Others say to set the amount based on how you expect your child to use the allowance, providing enough money to put in a savings account, give to charity, and to spend. Still others suggest giving your child an amount based on what other kids receive around the same age.

Whatever you choose, give it some thought, talk to your spouse and your child about a realistic amount, and start low rather than high. It’s always easier to increase a child’s allowance than to give him less because you started out giving too much.

As your child grows and matures, an allowance will help teach money management skills and develop responsible spending habits. Simply buying what your child needs and wants doesn’t allow the same learning opportunity. Giving an allowance may be a trial and error process for your family, but it’s one that is well worth the effort and learning curve. It will teach lifelong skills that your child will need—and thank you for—when your child becomes an adult.

How to Help Your Children Make Better Buying Decisions

So my some comes up to me and says, “Mom, I have a hundred dollars…Can I spend it?”  Since I am not quite sure how a 7 year old amassed over hundred bucks I said no.  I also said no because I know my kid has a passion for flim flam, gizmos and gimcrack.

Some children seem to be born with a natural money sense that helps them immediately to make smart spending decisions. The other 95% of children need to be taught how to save, and spend, their money. As a parent, it is one of your many jobs to help your children learn about money. It’s not always easy but it certainly is a valuable life lesson. Let’s explore a few tips and strategies to help your children make better buying decisions.

#1 Give Them Cash

When you take your children school shopping, do you wait in line to pay for everything or do you give them cash? Do you set a spending limit? One of the best ways to help children grasp the concept of money and spending limits is to give them a specific amount of cash to spend on school shopping.

For example, if you’ve allotted $150 per child for back to school clothes, give them $150 in cash. You can still hang around and approve the purchases – and you probably want to. However, make them carry the money, wait in line, and pay for their purchases from the cash you’ve give them. Under no circumstances do you give them any more. If they’re short at the end of the day and don’t have enough money to pay for a shirt they just have to have, too bad. This is a teaching moment!

And if they have cash left over? Consider letting them keep it, provided they spend it on stuff for school later.

#2 Make Them Save for It

When your child comes to you and says, “Mom can I have…” consider asking them to save their money to pay for part of the purchase. For example, your child may want a new iPhone or a gaming system. Fine. They can show you how badly they want it by saving up enough money to pay for half. Chances are if they really want it, they’ll save up. And if they don’t want it then you’ve saved yourself some money. It’s a good lesson in how to save and how to decide what’s worth saving for.

#3 Explain Real Costs

Speaking of that iPhone, it’s very easy for a child to place a dollar value on an item and to think in terms of black and white. However, many items – including the iPhone – continue to cost money. One year of data for a smart phone costs around $360, not including the actual cost of the phone. If your child wants a new iPhone, ask them if it’s worth $500 to them. It’s an opportunity to explain the real costs of things.

Children often learn about money by making mistakes. However, as a parent you can help them grasp a broader knowledge of money. They’ll begin to make better decisions and ideally make fewer money mistakes.

Tweet – 3 Surprising and effective tactics to teach your kids how to make smart buying decisions. LINK

How to Plan Back to School Shopping

Finally, an attack plan for the best of us.  Don’t let back to school shopping get you down.  Planning is the best way to get the most for your time and money. And when it comes to back to school spending, the goal is often to do it as quickly and as cheaply as possible. While it may seem too soon to start thinking about back to school shopping, it is right around the corner. Planning now will save you later.

Take a Look at What You Usually Spend

Take a look at your bank and credit card statements for the past few years to assess how much you usually spend. This information will help you set a budget for your children this year. Remember that school materials and supplies should be included in the budget along with clothing.

Take a Look at Your Current Budget

It’s quite possible that your financial situation is different than it was last year. Take a look at your current budget. How much can you afford to spend on back to school shopping this year? You may be able to spend more or you may have to spend less.

Additionally, knowing how much you spent last year can help you make good budgeting decisions this year. For example, if you know you spent $300 last year and can only afford $200 this year, you may be able to shift a few things in your monthly budget to find that extra $100.

Make a List of What You Need

How much have your children grown? What clothing do they need and what do they want? Make a list of the items they need and start prioritizing. Ask your children to get involved in this process. They can try last year’s clothing on and let you know which items they want to keep and which items are no longer appropriate.

What Stores Will You Visit?

As it gets closer to that inevitable shopping day, consider taking your child to thrift stores. Many used clothing stores sell brand name items that are in ideal condition. If your children are brand conscious, they may enjoy being able to purchase more for their money while still looking cool.

Give Them Cash

One of the best ways to stick to your budget and your shopping plan is to hand the budgeted amount to each child. Children have a tendency to go overboard when they’re shopping. They find that one brand name sweatshirt and spend half of their budget on it. Then they cry a few weeks later when they’re forced to wear the same shirt over and over again. They make much smarter buying decisions when they get to hold the cash in their hand. They tend to want to get more for their money – it almost becomes a game for them.

Decide when to Go

Finally, set the date. You can save a lot of money if you go school shopping about a month after school starts. Items go on sale and children are able to buy what the cool kids are wearing at school at a much lower price. If they absolutely must have a new outfit for school, then buy one outfit for that first day and then commit to taking them shopping in a few weeks when things go on sale.

 

Making the Grade: Back to School Shopping with Your Grade School Child

Because you can never have too much back to school information, here’s another bit of advice when mapping out your march to victory….It’s that time of year! Your child needs school supplies and clothes. Where do you start? How do you pay for it all? Here are some tips for making the grade with your grade school kid this year.

Dressed for Success

Your grade school child may not have the picky tastes of a teenager, but he or she is going to need some new clothes this year. Go through last year’s clothing and find out what fits and what doesn’t. This includes shoes, socks, and underwear, too. Grade school kids can grow really fast! Here are some more ideas for clothes shopping with your grade school child.

* Plan your shopping trip for a day when you don’t have to rush, and when you don’t have anything planned the night before. Being rested and ready helps everyone’s mood, and so does being able to take your time.

* Call the school where your child will be attending and make sure there aren’t any changes to the dress code. If your child will be attending this school for the first time, then find out what the dress code is.

* Keeping it simple helps a lot. Depending on his (or her) age, he will be better able to dress himself as the year goes on. Having easy-to-fasten clothes can help a lot to facilitate this process. Tough buttons (or lots of buttons), lacings, belts, and small head-holes can make dressing a frustrating experience. Go for clothes with large head-holes, zippers, and easy (and few) buttons.

School Supplies

Moving on to school supplies – like the clothes, it’s a good idea to check with your school and teacher to find out what specifics might be required. Some teachers specify brands, colors, and so forth. Here are some other tips for shopping for school supplies with your grade school child.

* Go generic on writing items like pens and pencils. Getting fancy, unique writing implements only leads to competition in the classroom and the possibility that your child’s fancy pens will get stolen. Unless the teacher requires otherwise, go with standard #2 pencils.

Markers should be water-based, and crayons are usually needed in packs of 16. Consider a box to store and carry these small, easily-lost items.

* Erasers are always needed in grade school. A large, pink eraser like you had in school is a good purchase. Some erasers that fit on the ends of pencils are inexpensive additions, too.

* Your child’s school may not supply paper like they did in the old days. Find out from your teacher/school if you need to supply ruled (lined) paper, which will differ from teacher to teacher and grade to grade.

* Notebooks come in many forms. Your grade school child will probably need some spiral-bound ones as well as some binders. Think slim and trim so the notebooks fit in your child’s desk, no matter what type is required.

You also might want to purchase some dividers or pocket folders to help your child stay organized.

Tweet: Back to grade school – check out these top tips for back to school shopping with your grade school child. LINK

Middle School: Tips for Helping Your Child Adjust

It’s back to school time – can you believe it  – and now that you’ve finished shopping, it’s time to start thinking about how to help your kid have a stellar year.  Lots of times we focus on our kindergartener, but really middle school can be a trying time. This is that age when children start to change from little kids to adults, and they have something of a battle going on inside them. Peers start to mean more, and parents may feel they are losing their influence. But there are some things you can do to help make it easier. Here are some tips for helping your child adjust to middle school.

Talk to Your Child

Have you tried asking your child some questions about his or her concerns about starting middle school? Try having a conversation where you don’t judge or show big reactions, and see if you can discern some of the things she’s concerned about. Try to phrase things positively, putting yourself in the position of helper not critic.

Remember Where Your Child’s Mind Is

You may be thinking only of academic performance and how this new stage will affect it, but did you stop to think about what your child is thinking about most? Do you remember what you were thinking about the most when you were in middle school?

Most kids this age are thinking about their friends, their looks, and boys/girls (whatever the opposite sex is). In other words, they are really much more focused on the social scene and what others think about them than they are about grades. This doesn’t mean you should let grades slide; it just helps you understand why their mindset seems to be changing. It is!

Tour the School

Just like for younger kids getting ready to start Kindergarten, your middle school student will be attending a new place with new teachers and classrooms. He will have lots of teachers – a different one for each subject – rather than one teacher all day.

So take your child for a tour of the school before the first day to help him get oriented. It can be overwhelming to change classes for the first time, trying to find the right classroom, the cafeteria, and so forth. You can help take some of the edge off by touring the school first.

Don’t Change Everything

This is a time of big upheaval for your child. Try to keep some of those comforting family routines and rituals in place as the middle school years roll around. Your child may not act like she values these traditions, but they can really help keep her secure and grounded in the middle of all the change.

Tweet: Middle school muddle? Help your child adjust to this significant transition with these practical tips. LINK