Are you horrified by the idea of giving your 10 year old a budget to work with? I can bet most parents would not agree to having their ‘innocent’ kids exposed to the idea of having money handed to them and they planning their weekend’s spending. Can you recall the time when moms would just take away all the Eidis from their young ones because after all mommy is a better money planner.
But giving small children the liberty to make their own financial decisions has its merits; more than you would be ready to admit. According to a Washington Post article, kids learn to budget for their own expenses once given the chance by adults. They also tend to expect their parents to make the bigger purchases for them. Things that fall out of their spending scale.
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Can we use this in a household? Yes. A small budget can be given to a child to spend on their own things. On the school front a subject can be introduced to the coursework so students can learn how to create a budget, how to spend money wisely, where to not spend money and how to sacrifice one expense for another.
What age is appropriate? As long as a kid knows how to add, subtract, multiply and divide they can be taught how to handle money. Many kids bring in tendencies of being spendthrifts with them but clever games and interactive school play can be helpful in teaching them useful money life skills. This may also help children learn the importance of earning their own cash.
As adults there is a lot you can still offer kids as they learn. Advice is something that they will never tire off. It will also teach them how to solicit advice when they need it later in life to make bigger money decisions. They will not only be grateful to you when they grow up, they will be better financial decision makers in a range of things, not just personal finance.
So it is decided. Giving financial liberty to kids is not a bad idea. It is actually a good one. And guiding them when they fail to make good decisions will actually help them when they are still learning as kids rather than making mistakes when they are older.