We were trying to decide how to approach money management with our children at a very young age.  After doing some research we came upon Dave Ramesy, a Financial author and radio host who helps people get control of their finances.  He recommends that financial education be taught starting at a very young age. One of the ways is to use a system which allocates money into savings, spending and giving categories.  We took a similar approach in our home.

Allowance is handed out once a month in our house.  The amount you get depends on your age (three year old = three dollars).  The money is not tied to chores as we expect the kids to keep up with their family responsibilities with our without allowance. What we really hope the allowance is doing is teaching them, at a young age, a thing or two about money.

The kids have three places where they keep their allowance which they split into thirds each month.   There is jar for savings, spending and sharing.   [Read more…]