Kids and Money
Once your child learns money buys things, they start asking and asking. Without a fixed budget, they don't learn to prioritize and they have no incentive to save. To your child, getting stuff is at Mom or Dad’s whim, and saying "no" often leads to confrontation. An allowance is the time-tested answer. With a fixed amount of money they control, they have to prioritize, and saving now gets them bigger things later.
A cash allowance has problems. Cash gets lost, stolen, or it's at home in the piggybank when your child is at the store. Real banks have fees and minimum withdraws that kill small balances. If you decide to "be the bank" it’s hard keeping track of balances, especially with Mom and Dad out separately with the children. Chores are a great way to teach responsibility, but it's hard to keep track of who did what when.
A virtual bank that always knows your child's current balance and what chores they've completed. Make deposits & withdraws and track chore progress from your computer or mobile phone. Your child develops the financial smarts that come from managing their own money -- without the problems of cash. When your child’s ready, add: savings accounts with interest charity accounts, borrowing and finance charges.
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