From the course: Teaching Your Kids About Finance
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To give an allowance or not?
From the course: Teaching Your Kids About Finance
To give an allowance or not?
- To give an allowance or not to give an allowance, that is the question. This seems to be the most popular question parents have these days. The subject of an allowance is really a personal decision. For many families, they feel strongly that their children should have an allowance so they learn how to save and how to spend. In my household, we actually don't give an allowance. But instead, we use a family economy system where we're giving out raffle tickets for activities that my kids go above and beyond what they're expected to do. In turn, they learn how to manage their tickets to spend them today or spend them for something in the future that they have to save for, say like a family vacation. I have a client who does a slightly different take on allowance to help teach savings and compounded growth. What they do is for every dollar that the child earns or receives, they will then match dollar for dollar. So say your child goes out and earns $5, then the child will then have the…
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