At first, understanding how we should allocate funds was a dilemma. I knew I did not want money to be a reward for chores. Not at this stage of the game.

Household chores help kids to develop a work ethic. An allowance helps kids develop money management skills. These are two critical yet separate lessons that should not be muddied by one another. Money and chores should not be interdependent at this stage.

And frankly, I do not like the idea of paying my kids to do the very tasks that I do not get paid to do (taking out the garbage, making beds, folding laundry, dishes, etc).

Our kids get money each week simply because they are a part of the family. They also need to help around the house simply because they are a part of the family.

Giving our kids money has helped achieve many goals:

1. Establish priorities for how to spend money.
2. Introduce the abstract idea of a necessity versus a desire (or need vs. want).
3. Introduce our practice to save 10%, give 10%, and spend 80%.
4. Discuss the less tangible concepts of giving and saving.
5. Consider how we will give the money (donations, hand-outs to homeless people, gifts for less fortunate kids, etc).
6. Check out the seven points from Teaching Kids About Money.

Money management is learned through trial and error. Simply handing out money is not enough. Money without restrictions leaves kids with a sense that there is cash to burn. This notion of disposable income is hard to outgrow. Kids need to be taught about money. Without this, the odds are that  they will be living paycheck to paycheck (i.e., in your house) long into their adult lives.

* Since some will be curious – our 5 year old receives $2 and our 2 year old receives $1. We give them money at our weekly family meetings.

Posts in this series:

• Top Rated Gift for Every Child
• Teaching Kids About Money
• The Do-Gooder’s Guide to Raising Generous Kids

Useful links:

• What Kids Need to Know About Money – MSN Money
• 8 Behaviors of the Financially Intelligent Parent
• The Financially Intelligent Parent (book link at Amazon)

Even if you perceive your own relationship with money to be healthy, it is a big responsibility to teach your child sound financial values. Even harder if you recognize that your own relationship with money is out of whack.

This series will help you to guide your child down the road toward a healthy financial outlook that is rich will gratitude and generosity. Subscribe here to get started.

The foundation to a healthy relationship with money is achieved with some thoughtful language and modeling. Below are seven good points to keep in mind:

1. When it comes to teaching kids about money, sooner is better.
2. Teach your kids that people can spend, save, and give away their money.
3. Teach them that money achieves necessities (food and shelter) and goals (traveling, philanthropy, etc).
4. Introduce the idea that people have different priorities for their money. Make a point to discuss your priorities with your child. Help them to create their own priorities.
5. Be mindful of your word choices. Rather than saying, “I have to go to work now.” Say, “I get to go to work now. I work so that we can have money to buy food or visit grandma and grandpa or so that you can go to school.”
6. Homeless people or those less fortunate will inevitably be a topic of concern for your child. How will you address this?
7. Give your child money so he can gain experience with it. I’ll talk much more about how to do this in an upcoming post. But just a word of warning – when you give your child the opportunity to have some money to spend, remember that there will be “mistakes”. Better to experience mistakes on a small scale when he’s young.  This way he can learn the importance of making good choices with money before the stakes go up.

Future posts will look at the art of giving and receiving as well as the importance of allowance for kids. Stay tuned, because you might be surprised by the post on allowances. If you’d like to follow this series, subscribe here and the posts will arrive in your email inbox.

Related post:

• Top Rated Gift for Every Child
• Raising a Financially Intelligent Kid
• The Do-Gooder’s Guide to Raising Generous Kids

All parents want their kids to be healthy and happy. The means to this end varies by culture, generations, family values, and income level.

Often in our society, parents try to make their kids happy by giving them things. Things, things, and more things. This happiness has the life span of a temporary tattoo. It wears off in about a week.

So, how do we help our kids find more enduring happiness? Develop their love of giving.

I first learned this lesson as a small child. I would be so excited to give my parents that special something that I didn’t want to keep it a secret for even a moment. I couldn’t contain my excitement!

Giving is still a high priority for me. I give blood. I give time. I give food. I give love. I give advice. I give money.

My kids are beginning to take note and question my motives. I want them to understand. I want them to feel similarly motivated.

Giving and money often go hand-in-hand. Time for a new series!

I’ll share my approach to teaching kids about both in upcoming posts. I’ll discuss mindful ways to share money with our children and teach the importance of giving, saving, and spending.

I’ll even share some concepts you might not have thought about. For example, I’ll introduce some surprising theories about allowances. I’ll also offer some useful tips to begin getting your child familiar with the intricacies of money.

If you’d like to follow this series, subscribe here and the posts will arrive in your email inbox.

If you have tackled this issue already, please share your stories. How did you introduce money?

Posts in series:

• Teaching Kids About Money
• Raising a Financially Intelligent Kid