In order to get good at anything, most of us need to practice at it. Sometimes we need a LOT of practice. This applies to getting good at making, managing and multiplying money!
Problem is, kids get practice with money but it’s with the “Spending” part of the skills and not the “Saving” and “Investing” aspects that will help them grow into money savvy adults who are wise spenders, savers and investors.
How do you give your kids enough practice with money so that they leave your home and know how to handle it wisely? You give them plenty of money practice while they are young. In other words, you make money a regular part of their lives, like brushing their teeth. You give them an allowance, but not the regular type of allowance. You give them The Ultimate Allowance!
What the heck is The Ultimate Allowance? Well, you know that money you spend on your children just to raise them? The $275,000 which is estimated that it takes to raise a child from birth to 17? You take part of that money and run it THROUGH them instead.
And you do this by taking small expenditures for them when they are 5-7 years old (different kids are ready at different ages) and you provide them with a budget of money for THEM to spend on the things you normally buy. The example I use in my book is hair accessories for girls. Let’s say you spend $20 a month on them for your little daughter because she breaks them, they wear out, she loses them, etc. Now, instead of buying them FOR her, you sit her down and tell her you’re going to give her $5 a week and she will be responsible for buying them herself.
Applying this theory to more and more supplies (clothes, shoes, socks, school supplies) as they get older, they begin to have confidence with money as they make great choices and have great successes and also as they make choices that…well…lead to some new learning about money!
Do you need a stringent plan to do this? No. Would it help? Sure, plans always make things easier. If you want, grab a copy of The Ultimate Allowance. Otherwise, you get the gist of it…give them practice and lots of it if you want them to grow up happy, healthy, wealthy and wise!