Should your 5-year-old get an allowance? How much? Should he get a few dollars a week, with no strings attached? Or should the allowance be based on him performing certain household chores?
It’s never too early to start teaching a child about money management, says WebMD's guest parenting expert, Tanya Altmann, MD, in the online discussion about Healthy Family Routines. If a child is old enough to say “I want that!” they’re old enough to learn that things cost money.
The decision about whether or not to give a child an allowance -- and at what age -- is a decision that varies from family to family. Altmann offers a few money lessons that can be good for different age groups:
Preschoolers: Give your child a piggy bank and help them deposit a few coins in it from time to time. You might be able to start teaching them how much different coins cost around age 4.
Grade-schoolers: Start talking about saving, spending, and donating. Help your child set savings goals for things she wants to buy.
Tweens: This might be the time to increase your child's allowance. Help him think about short- and long-term savings -- saving for a new video game or an electric guitar vs. saving for college.
Altmann states that, even in the tween years, parents should continue to supervise their children's spending and help guide them as they learn how to make good financial choices.
What methods have you used to teach your child about money? How do you teach your child to set financial goals and plan for the future?