Here are three options used by parents:

  1. The Dole System. Parents give children money as they see fit. There’s no emphasis on budgeting or saving.
  2. Earned Spending Money. Parents pay children for doing chores. The children can budget and save.
  3. Allowances. Parents regularly give children a set amount of money.

As you consider which option to use, ask yourself these questions:

  • What is the money for? Is the goal to have your child learn to handle money responsibly? Is the money for things your child needs or for extras he wants?
  • Who buys what? Will you cover all his expenses, or will he become responsible for things like posters and CDs?
  • How much control will he have? Can he use his money to purchase anything he wishes, or will there be limits?

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