CNN News — The Best Way to Make Kids Smart About Money
Dee Shepherd-Look, a clinical psychologist and retired professor of psychology
It is recommended starting an allowance when children enter the first grade, and increase the amount they receive as they get older. She said that children don’t start to value money until they are in junior high. The allowance that is given to them should also depend on their behavior and how good they are at school and at home. For younger kids, they can be rewarded by smaller items like candy at the movies or buying an app. As children grow, so should their allowance and financial responsibilities. “Once they hit middle school, you still pay for the basics, but maybe for the school year when you go shopping, you cover three pairs of jeans and if the kid wants an extra cool pair, they have to save for it or pay the difference.”
Saving is the absence of spending. Savings refers to the dollars that become available when people abstain from consumption. Our financial system evolves to meet the needs of both savers and investors. Saving is a big part of our life and is helpful toward our future and everyone should do it.
Starting as kids and understanding the value of money and when to spend and when not to spend is very important. If they understand at a young age, as they get older it will not be as hard when they become an adult. If we wait to learn, it will be harder to learn.