We've talked about WHY you give your child allowance. We've talked about passing on your money VALUES to your children. So, you're ready to jump in and give allowance. Stop! There is one more important step.
It is important to know your child. Just like all those parenting books say – each child has their own personality….and each one will have their own financial personality!
Are they a saver? Or are they a spender? You will need to know so you can adjust their allowance to fit them. Your child may not have extreme traits but he or she will tend to lean towards a saver or a spender.
Here are a few questions that will help you determine if your child is a saver or a spender:
How do they treat their money?
A spender tends to….leave their money lying around the house.
A saver tends to…carefully put their money in their wallet or piggy bank.
How do they handle gift certificates or “found” money?
A spender tends to… rush to the store to spend it all.
A saver tends to…be reluctant to spend it and will save it for “later”.
How do they decide what they want to buy?
A spender tends to…want the “hot” new toy that their friends have or will be swayed by advertising.
A saver tends to…be more careful in choosing their purchases and may save up and then choose not to buy the item after all.
How does your child treat your money?
A spender tends to….be willing to pay for something with their own money if you won’t open your wallet for it.
A saver tends to…let you pay whenever your offer!
ACTION PLAN
If you have a spender – you can give allowance on a day when they can’t rush out to spend it or pay them less often so they learn to spread out their allowance and make it last until next payday.
If you have a saver – you will need to set short and long term spending goals so they can see the joy of spending their hard earned savings.
Helping parents teach their children to become financially responsible
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