One of my most popular posts of all time is Kids and Allowance. As parents we don’t just struggle to manage our own finances, but we want to teach our kids smart money saving strategies.
We want them to grow up and learn how to manage money without making the stupid mistakes we made or make. It’s a tough balance though, kids need to make their own mistakes to learn, so what’s a parent to do?
I highly recommend an allowance for kids. You can set up allowances in a number of ways, but try not to get too hung up on what’s right and wrong. Do what makes sense to you and your partner or spouse, and don’t be afraid to change things if it doesn’t work.
For younger kids (age 2-7) I recommend giving them a small amount of money each week or month and making sure they have a place to stash their cash. Typically kids are really into coins too, and you’ll need something special to store them. While you can buy lots of different piggy banks, I really love this Money Savvy Generation piggy bank. It has slots for Save, Spend, Donate, and Invest. While they may not understand the concepts at first try having them give their change to a cause they care about, or “investing” with the bank of mom and dad (try paying them 10% interest every month).
For the next 3 days, the piggy bank is on sale through Savvy Source. It retails for $20, but with this discount you can get it for $10.
For older kids (I recommend 8 and up) I highly recommend FamZoo. FamZoo is like Mint for kids. It looks like an online bank, but you can create payments, and manage money for everything from allowances to specific chores with their interface. It also allows kids to set aside a percentage of their money for things like long term savings, and charity. One of the main reasons I like FamZoo is that when you put cash into kids’ (and really most adults’) hands they are more liable to spend it.
FamZoo has a monthly fee, but you can sign up with a 3 month trial with coupon code CENTSIBLESAVINGS, that way you can try before you buy.
Using FamZoo over the last few months has allowed my family to keep track of the kids’ allowances online, and has encouraged them to save more. It’s also been useful for seeing how long it will take to save for a particular goal, and how quickly their money is growing.
The money isn’t “real”, it’s meant to mirror what a real online bank looks like, so you won’t actually be giving them your money or handing over passwords to bank accounts to your kids.
Once your children reach the age where they always have their hand out it can be a useful tool to show them how much they are really spending, and how much time it takes for them to earn that $10 they just blew on magazines.
These are just two of the products we’ve used and loved. Have you found any products that are helpful in teaching kids money smarts?
Kelly
Disclosure: The link to the Money Savvy Pig is an affiliate link which means I get some pennies for every purchase made. FamZoo is a client of my consulting business.
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