Lesson #1: Learning to handle an allowance
An allowance is often a child’s first brush with financial independence. With allowance money in hand, your child can begin saving and budgeting for the things he or she wants.

A good rule of thumb used by many parents is to give a child 50 cents or $1 per week for every year of age. Also, consider what your child will need to pay for out of his or her allowance, and how much of it will go into savings.

Set some parameters. Sit down and talk to your child about the types of purchases you expect her or him to make, and how much of the allowance should go towards savings. Stick to a regular schedule. Give your child the same amount of money on the same day each week. Consider giving an allowance “raise” to reward your child for handling their allowance well.

Lesson #2: Opening a bank account
Taking your child to the bank to open an account is a simple way to introduce the concept of saving money. Your child will learn how savings accounts work, and will enjoy trips to the bank to make deposits.

Lesson #3 Setting and saving for financial goals
Let your child set his own goals (within reason). Encourage your child to divide his money up into savings, charity and fun money. Write down their goals and follow up monthly to monitor their progress.

Lesson #4 Earning money should not be hand out
Allow your kids to earn money, even if it is as a result of doing chores around the house, babysitting, and mowing lawns. This will give your children a sense of accomplishment and create responsibility of how they are going to spend it.

Don’t expect your kids to buy into the “long term” goal planning. They will lose interest fast! For teens and college-bound students, teach them about budgeting, obtaining “good” credit, savings and investing.

Patricia Lampert can be reached at 724-743-4755, or by e-mail at plampert@patricialampert.com.