When starting an allowance, parents should teach children how to set up a spending plan, keep records and set money aside for savings. It is important to gear the information toward the age and ability of the child.
Parents can then teach their children the value of a dollar by providing them a list of supplies they have to buy and a budget. Decide on how much they have to spend and then do research and comparison shopping using advertisements, newspaper inserts and in store research. You can help your children out by shopping with them and allowing them to be invested in the process.
Some of the best lessons learned occur when they over budget and they don’t have enough money. Then comes, what are they going to do without and what changes will they have to make?
Additional lessons can be gained by teaching the older children to balance the checking account and paying bills. These can all be ways to help your children be better at money management.
Source: Missouri State Cooperative Extension and Texas A&M AgriLife Extension