6 Tips for Creating a Successful Allowance System

from 401kcalculator.org

An allowance system is one option for teaching money management to kids and can be an effective tool. However, it requires more than just handing your child some cash every Friday.  Here are 6 tips for creating a successful allowance system in your family.

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Sunday Funnies #3

We'll start off the Sunday Funnies this week with my dog, Rascal.   He has a "boo-boo" on his foot  so we have had several days of the Cone of Shame.













And...on to more things that made me laugh:

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Pam's Picks: America Saves Week

This past week has been America Saves Week and there have been many, many fabulous articles written about saving and financial literacy.  America Saves and the American Savings Education Council are the two coordinators of this event.  They both have resources for all ages.  Here are some of the articles and resources they have posted (not just from this week) that pertain to kids, teens and money management.

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I Gave my Kids a Money Pop Quiz

I have been out of commission for most of the week (either a cold or the flu...doesn't matter as long as it goes away).  To save time and energy, I am re-posting an entry that originally ran in March, 2011.  Hope you enjoy...

Frank and I try to include our kids in many money discussions. It can be as simple as which cereal to choose in the store and as difficult as explaining why it is not feasible to pay $3000 for a school trip (seriously!). All in all, I think my kids are fairly responsible money managers for their different ages. Last night I decided to give them a surprise quiz! So after dinner, when each kid had gone off to do their own thing, I decided to talk with each one individually. I asked them each the same question, “If you had a friend who just started getting an allowance (or paycheck), what advice would you give them about having their own money?”

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Let's Talk about Money! 4 Tips for Starting the Conversation with Your Child

Image via paulhami on flikr

Would you ever hand your car keys to a teen that has never driven?  Would you hand a book to a 4 year old child and expect her to learn to read it by herself?  I am guessing that most folks would answer "No" to both of those questions.  When teaching a child or a teen new skills, there has to be some parental interaction and guidelines.

The same thing applies to teaching a child or teen about money management.  If you just hand your child a wad of money, they will learn very little about responsible money management.  There has to be ongoing conversations and consistent guidelines (regardless of whether your child gets an allowance or not) in order for your child to become financially literate.  I was thrilled to find two articles recently that covered this topic.

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Sunday Funnies #2

Pull up a chair and share a laugh with me...

Source: iwastesomuchtime.com via Brittany on Pinterest

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Pam's Picks: Articles, Carnivals and Giveaways

Let's jump right to it.  Here are some fabulous finance articles from around the web this week.

Kids Money Management discussed teaching teenagers about budgeting.
Boomer from Boomer and Echo tells us how to put your kids to work.
Your Smart Money Moves listed the  Top 10 Unusual Scholarships 
Paul at The Frugal Toad discussed Personal Finance for College Graduates.
Nicolas Pell on Mint listed the best college majors by salary.
College Parent Central had a roundup of resources for staying safe and healthy in college.

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What Can Shopping for Kid's Clothes Teach about Financial Literacy?

Twice in the past week I have noticed that my kids are once again out-growing their clothes.  My youngest child put on a pair of pajama pants that fit him last winter and now they look like Capri pants.  And then…one of my older boys reminded me that he needs new dress shoes.  I was a bit skeptical, until I realized that his current shoes were two sizes too small.  It’s kind of hard to argue with that.  It looks like we will be doing some shopping this weekend.

Shopping for kids clothes doesn’t have to be a budget buster.  In fact, there can be opportunities for your child or teen to learn and practice responsible financial management skills.

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$50 Amazon or Paypal Giveaway!

The MoneyTrail Blog's ONE YEAR ANNIVERSARY is coming up on March 2nd, 2012.  What a perfect reason for a celebration!  So, I am giving one lucky blog reader a $50 credit to Amazon.com or Paypal --- the winner can have their choice.  I figured that you guys come to our blog to read about family and finances so what better way to celebrate than by giving a reader some bonus spending/saving money!

The raffle starts at 12:01 am EST on Monday, February 13, 2012 and ends at 12:01 am EST on March 2, 2012.  The winner will be randomly selected by www.random.org and must have a verified email in order to receive the prize.

Entry is easy.  Just follow the directions below in the Rafflecopter box.  Each task gives you one entry into the raffle.  And...you can tweet about it once a day to earn more entries.  Visit Rafflecopter's quick demo video if you have questions about how to start.

Hey...what's taking you so long?  Enter today and tell your friends to enter too!
MoneyTrail scrabble image created by Brittany Whitlock
Online-Sweepstakes.com 
www.contestgirl.com

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Pam's Picks: From Helicopter Parents to Duct Tape

I found quite a range of articles this week dealing with parents, children and financial literacy.  One side of the parenting spectrum presented by AJC blog was about helicopter parents who head off to work with their adult children, even joining them on job interviews.

At the other end of the spectrum were parents who encourage independence and entrepreneurship in their children, such as Len Penzo.  Len's 12 year old daughter, Nina, wrote a post this week about her latest business ventures, one of which involves duct tape!  This is one talented, motivated young lady.

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The Sunday Funnies

Laughter is the best medicine, right?  Take a moment and have a laugh with me.  Here are a few things that made me chuckle this week...

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A Thrifty Family Valentine's Day

My youngest son gave me this Valentine last year.  I'm still not quite sure how he came up with "Best supervisor ever" but it is just cute enough and just sweet enough to tug at my heart strings.  And, it didn't cost a thing.

Valentine's Day costs can really add up.  A gift for your spouse, a nice dinner and cards & candy for your child to exchange with his classmates can put your budget over the top.   Want to celebrate Valentine's Day this year without busting your budget?

Here are some frugal ideas to show your family how much you care.

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A Conversation with David Domzalski from Financial Bin

I was honored yesterday to be interviewed on a podcast with David Domzalski of Financial Bin, a company that focuses on personal finance and entrepreneurial education for the Generation Y age group.  If you haven't checked out his website, please do.  It is a fabulous resource for personal finance, budgeting, wealth, real estate and entrepreneurship.  He has a long list of highly qualified contributors that keep their content fresh and relevant.  David also hosts podcasts several times a week so scoot on over to his site and take a look around.

Here is the internet radio segment of David and me talking about MoneyTrail and teaching kids & teens about money.

Listen to internet radio with FinancialBin on Blog Talk Radio

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Teaching Money to Preschoolers Through Play

My husband keeps this play check on his bulletin board at his desk.   Our daughter gave it to him many years ago when she was about 4 years old.  (She is 18 now.)  She used to love to play “pretend” and I am sure she had a precise reason for giving her Daddy a check for $50.   Her imagination enabled her to be a mommy, a teacher, a chef, a dentist, a dog walker and a grocery store clerk, among many, many other imaginary careers.  One of her favorite toys was a toy cash register.  She kept it filled with play money, old tickets, discontinued checks and the little plastic credit card samples that come in the mail with credit card offers.  (Note:  coins (play or real) can be a choking hazard so supervise your kids carefully).  As I was looking at this check recently and reminiscing about our little girl, I started thinking about the money concepts that can be learned and practiced through preschool play.

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Pam's Picks: The Jello Edition

It's been a busy week around the Whitlock household --- jury duty, an injured finger and a little situation with Jello.  It seems that my youngest two sons decided to see how difficult it would be to throw orange jello in the air and catch it in their mouths.  They learned that it was more difficult than they originally thought and that a broom & dustpan aren't the best option for cleaning up the mess.  They also learned that based upon the amount of orange stickiness, their mom can figure out that they weren't doing their homework.

Motivated by this little episode, I went in search of alternative uses for Jello and found a fun Jello playdough recipe.  It requires some cooking so parent supervision is necessary but maybe it won't end up all over your kitchen.

And now...on to the financial articles from this week:

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Teaching Your Kids about Money: February Edition

Investing and Growing Your Money

Teaching your Kids about Money is a comprehensive guide for teaching your child or teen about money management and financial literacy.  At the beginning of each month in 2012, I will give you more information and tips about introducing these topics in your family and will share some practical ideas for implementing these concepts into your everyday life.  For previous month's topics, click here. Our February topic is Investing and Growing Your Money.

Investing and growing money is an often overlooked area of financial literacy with kids.  We tend to view investments and money growth as something that adults should do.  We learn about our 401Ks, study the stock market and determine how to best diversify our investments.  However, when it comes to our kids, we often just hand them their allowance or pay them for odd jobs around the house. 

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