Here are three options used by parents:
- The Dole System. Parents give children money as they see fit. There’s no emphasis on budgeting or saving.
- Earned Spending Money. Parents pay children for doing chores. The children can budget and save.
- 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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