Alphabetic Guide to Child Care - Money

Money

Money may not be the root of all evil, but it certainly is the cause of a lot of family quarrels. To communicate to children the value of money and how to use it, spend it, save it, borrow it, lend it, and earn it, parents should try to clarify their own attitudes and settle their own differences.

Young children hear money talked about all the time: “We can't afford it,” “That's a bargain,” “That's a waste of money.” What does it all mean to a preschooler?

The Weekly Allowance

The best way for a child to get firsthand experience in dealing with “I need” and “I want” in terms of cash on hand is to give her a weekly allowance. There isn't any point in doing this until she has mastered addition and subtraction. If the prospect of getting an allowance is motivation for improving her number skills at school, so much the better. The amount of the allowance should be calculated in terms of what it's supposed to cover. These details should be spelled out so that there's no confusion about who is responsible for paying for what. As the child gets older, the amount is adjusted for increasing needs—social occasions such as a ten-year-old might enjoy when she and her friends stop for an ice-cream cone on the way home from school.

Saving

If the family feels that a child should be required to save part of her allowance, a piggy bank and a brief talk about the virtues of saving are essential. Some children get so anxious about money that they turn into misers. When this occurs, it may be advisable to point out that the money is not meant to be hoarded but to be spent on needs and treats. Children who receive birthday or other special presents in the form of money from relatives can open a bank account and learn about interest accrual. Although the money is rightfully theirs, they might be encouraged to consult the family before they spend it all on a passing enthusiasm.