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There are numerous articles and books out today on the subject of kids and money. Articles from ‘how much to give a child for an allowance’, to ‘how to teach a teenager to be money-wise’. I hope that you will give your child the opportunity to earn his or her own money, and this lesson should be long before the teenage years. Kids taught at an early age to earn and save their own money, acquire a much better respect for money.
How old should a child be before they are paid for work?
If a child old enough to do simple chores and understand the concept of money itself, he or she is old enough to earn their own money. Depending on the child, this could be as young as five, or not until they are ten or older…you know your child best and will have to make the final decision. These chores should be outside of normal everyday chores. Do not confuse a child by paying him or her for chores that are necessary to the household he or she lives in. Examples of chores that could be considered everyday, normal non-paying chores could include:
Washing dishes
Cleaning own room
Taking out garbage
Setting table
Chores that could fall into the paying category, depending on age, could be:
Cleaning out closets
Running errands
Babysitting younger siblings
Bathing the family dog
Helping with a family rummage sale
Older children can, depending on the neighborhood they live in, also earn money from outside sources. Paper routes, walking neighbor’s pets or watering their plants when they go on vacation, mowing lawns, or even shoveling snow. Encouraging children to also volunteer their time and services, for instance to some elderly neighbors, always seems to make them appreciate the money they have earned doing similar chores for others. If a child can learn to appreciate his or her earned money, they value it more and the result is having learned the fine art of saving.
Spending verses visual earning.
A child that is allowed to spend his money with no thought involved will learn nothing more than the act of spending itself. If a child is guided in his spending, for example, picking out a costly item, and saving up for that item, the child instinctively learns the act of saving.
Kids today like to have visual reminders of their savings. A piggy bank can be visual, but easy access is not always good. The exception here is very young children, who like to keep counting what they have saved, and are learning as they count. Older children benefit greatly by having a savings account. They have the visual account book that lets them keep track of their earnings, but limits their easy access to the money, making them consider all purchases at least a bit. They also will learn about interest being earned just for doing nothing more than saving the money. Do not just take the child’s money and open an account for them. Allowing the child to go with and actually participate in the activation of the account, can be a major learning experience in itself.
If you bank online and understand the workings of access in this manner, and your children are old enough that you allow them to use the internet, you could also consider setting them up a savings account that offers an online feature. Allowing them to check their growing balance from their interest earned can be an added fun benefit.
Other money kids encounter.
Remind kids that money given at birthdays and other holidays can also be saved. You would be surprised at the number of kids who while good about saving and spending money earned think nothing of blowing money given to them.
It is their money.
Remembering that the money kids earn belongs to their kids, can be a hard lesson for some parents. If we encourage our kids to earn and save, we have to give them the freedom to spend it. If you have guided them in the acts of saving and they still spend it foolishly, bite your tongue, remind yourself it is their money they wasted, not yours. Do you also do nothing else? No, after keeping quiet about their purchase, try to find some way to reinforce what you have been teaching them about money and saving. When the item they purchased foolishly fails to meet their expectations, they will have learned a lesson the hard way and it will be one they will not soon forget. If they are thrilled with what we considered a foolish purchase, maybe it was not so foolish after all. It is, after all, their money they earned and saved!
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