My 6 year old has been extremely helpful around the house. He helps with just about everything from taking out the dishes, wiping the table, cleaning his room and the front and so on. It makes me very happy to see him volunteering his help in such ways. This led to my wife and I deciding to go ahead and start giving my son an allowance. It is something that we talked about doing before but he was always a bit too young. Now that he is older it seems as though it will be a good time to start to teach him about money and how one earns it and what one can do with it.
The first thing that I did with him was to show him was how an ATM works. He withdrew a total of 60 dollars out of the ATM. He then looked at the 20 dollar bill. I showed him the security markings and who was on the 20 dollar bill. He went home with the bill in his pocket pleased as punch. Now to show him how to be responsible with the money I sat him down and started telling him about charity, investment, savings and fun money. I think he seemed to get it cause he was asking me questions about how to invest.
The way we broke the money down was 50 percent into savings. This will be held in his glass jar for the time being and then in a couple of years we will set up an investment account. I told him all about bonds, stock and interest. He seemed kind of bored with this, but hey who can blame him right? After that I told him 10 percent would go to charity or in this case the church. I told him about the ten percent that God asks of us and explained to him how important it is to give money to charities and causes we believe in. He was very happy about giving money to God. Then we went on to fun money which is 30 percent of the total. This is the money you can spend on what ever you want, whether it is going to be saved or spent immediately it is his choice. Finally I told him about savings. Another one of those moments where he got really bored. But I guess he got it.
I was never given an allowance and not taught very much about money management and in general I think that most people aren’t. But this is one of the subjects that really needs to be addressed with children,just cause so much of your life is wrapped around money. Being able to provide them with money management skills and awareness will put them ahead of their peers. Hopefully this will help Jack in the future and get him ready to handle his finances with care.