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One of the best ways to teach your child the value of money, how to handle their finances and not blow their cash is by giving them a weekly or monthly allowance. However, before you start shelling out any cash, you should think about your plan of action is going to be.


Does your child understand how to count money?
The main intent of an allowance is to educate your child on how to be fiscally responsible. That goal is not going to be accomplished if they do not know how to count money or have the knowledge of what money is used for.

Pre-determine how much of your child's allowance is going to be saved and how much will be spent.
Don't expect your kid to purchase there own necessities from their allowance. However, the purchasing of toys and/or candy should be used with allowance money. Saving a portion of the allowance should also be implemented in the plan.

If you have children that are older, consider increasing their allowance enough so that they can pay for things like lunches, movies, etc.. This will help them understand and manage their money.

Think about associating the allowance with some sort of household chore/s
Tying chores in with allowance is good. Rewarding your child for doing additional tasks around the house is good for both of you. It will mean less work for you but more importantly teaches responsibility of having to 'earn' money

Raises will be required!
Your child's allowance is going to have to increase in proportion to how much you expect from them. Meaning, are the household responsibilities increasing? What about the cost of living? Are their social lives flowering? To keep the learning idea going, it is always a good idea to re-negotiate your child's allowance. Re-discuss how the money will be used and how much is going to be expected for saving.


Determining what your child's allowance should be is not easy!
Your final decision of how much money to give for an allowance, and how often, is going to be based on several variables. You need to think about your income and your personal values. Don't base your decision on what you used to receive for allowance as a child.

Once your child is of legal age, help build their credit!
Open up some utilities in their name. Let them apply for a no credit personal loan or student auto loan. You can learn more about how to build credit.

Related Reading:
- What you need to look for in a vehicle when buying your teenager's first car.




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Managing Money Info: Financial Strategies | Financial Emergencies | Money Issues | Allowances
Teaching Kids Credit | Saving Money | Savings/Investing Calculator | Trimming Expenditures
Cut Grocery Store Costs | Avoid Wasting | Why You Should Budget | Developing a Plan
Mistakes to Avoid | Money Spending Challenge | Checking Accounts Money

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