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Pricing Allowances for Kids

How often should you pay your child their allowance, and how much should it be? If you're not making your kids allowance contingent on chores, should he or she get less money than if they were to work for it? Pricing allowances for kids deserves some careful thought. Whether or not chores are involved, a pretty standard structure that kept popping up in my research is that children get either fifty cents or $1 weekly for every year they are born. This is a convenient way to price an allowance because the concept is easy for the child to grasp, and it’s simple to divide the money among the various parts of your child’s budget. This ascending structure also neatly takes care of the problem of

How to Determine a Proper Allowance for Kids

Allowances are not quite as simple as they appear on the surface. Fortunately, having a plan for your allowance system doesn’t take too much work and vastly increases the impact of the allowance on your child’s financial skills. Giving an allowance is not about enabling them to pay for themselves when they go to the movies. Rather than viewing your children's allowance as "spending money," think about it as a tool. Carefully considered, an allowance is the first and best way for children to get a chance to manage their own finances. I’ve heard some people argue that giving your child an allowance will breed entitlement. Given without consideration, I agree that it is the equivalent of just t

The Importance of Financial Plans

Financial planning is a pain, but it’s necessary to do. It becomes even more important when you have children relying on you. You need to be able to teach your child how to plan, and you’ll want to have the resources to care for them without compromising your—or her—financial future. Planning for the future can encompass things as simple as saving for a car, a home, or your retirement. Maybe you have a savings account, a Roth IRA, or diverse assets managed by a legion of wealth advisors. Regardless of your situation, raising a child to age 18 is costly. Saving for their education will take planning, even if they earn scholarship money. Perhaps you want to be financially involved later in the

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