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Allowance Magic: Turn Your Kids Into Money Wizards
by David McCurrach |
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While many kids get an allowance, not as many learn how to really manage their money. And it is an important lesson if you hope that they avoid the large amounts of credit card debt many adults have today and learn to live within their means when they get older.
The record amounts of consumer today we are seeing today helps to illustrate the problem. Even kids in college, in addition to their school loans, are building up high interest credit card debt.
Allowance Magic will help you to teach your kids how to save, spend, and manage their money to help them 'develop financial responsibility'.
Using the Allowance Magic system, instead of giving your kids an arbitrary amount of money each week, you figure out how money they typically end up spending. You then use that amount as a guide to how much allowance to give your child, who now has the responsibility to manage his money so that he can buy all of the things he really needs from his list. This might include buying toys and snacks, renting movies, or going to an amusement park.
Having a set amount of money, your child will quickly realize that if he isn't careful, then he will run out of money.
Once you get started, instead of opening your purse or wallet everytime your child asks for something, he will be able to use his own money if he decides it is something he really wants to have. In the long run, you will likely find that you are spending less money on your kids, as you avoid many impulse buys at the grocery store checkout lane, etc.
In addition to the Spending Amount, older children can have a certain amount of money that they save, share, and give away as gifts from each allowance. You might also set up separate allowances for things your child really needs, so that he doesn't spend all of his money on video games and has no money left over to buy clothes.
Don't think it will work or that it is too hard? Then try it on a smaller scale first. For example, say that on a tyical trip to the movies, your child asks for popcorn, soda, candy, and then wants to play a few video games. Instead of spending money on each thing your child wants, you might figure out just how much you really think he should spend.
Maybe, in addition to the price of the movie ticket, you think it is fair that he has a small popcorn and a small soda. Using the Allowance Magic method, you would give him the $5 or $6 that might cost and leave it up to him as to what he spends it on. So if he wants candy or to play a few video games, then he will discover that he won't have enough for his popcorn.
On a trip to a baseball game, you might give enough for one souvenir and one snack or drink, and leave it up to your child what to buy.
Of course, once you implement the full Allowance Magic plan, these entertainment expenses would be a part of your child's full spending plan.
In addition to the Kid's Money Wizard Journal that includes worksheets to figure out your spending amount, saving and sharing plan, and allowance amount, Allowance Magic covers most details that might come up. These include considering a matching saving plan, how to count earnings from extra jobs, and dealing with money transfers and loans.
Allowance Magic will help you to turn your child's allowance into a real tool to help him learn how to manage his money, plan his spending, and learn to save for larger things that he really wants to have.
Rating: 5 stars (This is essential reading if your kids think you are made of money and they have no concept of the value of money.)
Or look for other books about kids and allowances.
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