Once children reach a certain age, often around 6 or 7 years old, parents may begin giving them an allowance. While some parents may question whether it’s the right time, the truth is that an allowance can be a fantastic tool for introducing basic financial concepts. Giving children a fixed amount of money each week or month encourages them to make decisions about spending, saving, and even sharing.
The decision to start an allowance depends on several factors, including the child’s maturity and the family’s financial situation. For younger kids, parents can start small and explain the basics: money is earned, saved, and spent wisely. Once this routine is established, the real lessons can begin. Parents should sit down with their kids to talk about what they want to buy and help them set realistic goals for how much they need to save in order to reach those goals. This also opens the door to teach them about the importance of patience and deferred gratification—a skill that will prove invaluable as they grow older.
