How Finance Experts Teach Their Kids About Money

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Erika Rasmusson Janes on Jul 27, 2010 at 4:29PM

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Allot an Allowance

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a Erika Rasmusson Janes on Aug 27, 2010 at 4:31PM

In order to understand money, kids should have some of their own. A weekly or monthly allowance is an ideal way to start. “Allowance helps kids become comfortable with money and learn how to spend it mindfully,” Sandberg says. While some experts say kids as young as three or four can handle an allowance, Sandberg waited until her daughter turned six, giving her $6 a month. (Giving one dollar for every year of your child’s age is a common strategy.) In Sandberg’s view, an allowance should be a small but meaningful base sum that’s not tied to chores or grades. Then, give your kids the opportunity to earn more money by working -- anything from dusting the TV set to babysitting siblings. The reason? “It shows that you can create a far better life by putting forth some effort,” Sandberg says. Many parents let kids choose how they spend their allowance, but if you have any ground rules -- like no junk food or video games -- set them upfront. “None of that should be a surprise,” Sandberg says.

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