Lynne Finch, author of the award-winning book “The No-Cash Allowance” will be presenting two talks for parents on the topic, “How much allowance should I give my child?” Finch is a Money Smart Partner promoting public awareness by offering educational activities during the annual event.
Finch will discuss 1) Why kids need an allowance, 2) What goes into deciding the allowance amount, 3) How to plan allowance increases as the child grows, 4) What is needed to make allowances fit in the family budget, and 5) An easy method for paying allowance.
Parents will look at the benefits of kids having an allowance, fill out a worksheet to help them calculate the right allowance for their child, and learn how to set up a system that will teach their kids good money management skills. Attendees will receive an allowance start-up kit and a discounted price on her book.
Money Smart Week is a public awareness campaign designed to help consumers better manage their personal finances. The effort was created by the Federal Reserve Bank of Chicago in 2002.
The No-Cash Allowance by Lynne Finch is an inventive, original system that is thoroughly explained and easy to understand. Children from pre-school through high school can practice concepts of debit card, ATMs, electronic transfers and credit transactions using their own money. Examples of dialogue between parent and child create a picture of real life situations. A no-cash allowance places continuing control of cash and non-cash money in the hands of the child to create a child-size version of real-life money management and responsibility that is similar to that of an adult.
Our family was at a restaurant with when my seven-year-old grandson glanced at his mom. She nodded as if to say “It’s okay, you can ask her.” He looked at me, “I was wondering about money. You don’t work, so where do you get your money from?”
His question surprised me but made perfect sense. He knew that parents have jobs but couldn’t figure out how his grandparents got money if they didn’t have jobs.
After I got over my initial surprise I told him that while we worked we did not spend all our money. We put money in a retirement account to spend later.
That made sense to him because he’d learned that when he didn’t spend his allowance one week he had more the following week. So he understood the concept that saving money is making a decision to not spend.
Then I added one more thought for him to consider, “When you start working you make it habit to ‘“not spend’ all your money. If you let that money grow during the years you work you will also have money to spend when you retire.”
Here’s where his mom and dad can then take the conversation further by showing him the power of compound interest and how much his money can grow. When he sees those numbers his eyes will light up. A big lesson for a little boy.
Lynne Finch helps parents teach their kids about money from piggy banks to online banking. “It’s time to teach the kids how to manage money they can’t see or touch,” says the author of The No-Cash Allowance. Follow Lynne’s common sense approach for teaching children that money is a number with kids as young as pre-school and continuing through high school.