Sometimes, it feels like the kids just want, want, want. How can we guide them toward wise spending and saving?

THE MOM OF THREE SAYS…

“We do a weekly allowance based on their age ($1/year of age) for being a contributing family member. It is split into spend, save, and give jars. We let them use the ‘give’ money to support school fundraisers or other causes that are important to them. They have bank accounts and deposit some of their ‘save’ money. We buy the basic things, but if they want a soda at a restaurant instead of water, for instance, they have to use their ‘spend’ money.

You have to stay steadfast in the plan. We aren’t always great at enforcing it, but it has made it easier for us to say ‘no.’ It’s hard for me to watch them use their ‘spend’ money on junk, but that’s part of the learning process of not having money to spend later.”

—Anne Hawley, Denver, mom of an eight-year-old and six-year-old twins

THE VP OF A KIDS BANK SAYS…

“Kids develop spending habits based on examples set by parents or guardians. When talking to them about spending, use relevant, tangible examples, and short- and long-term goals, geared toward their interests and age. Financial literacy books, games, and online resources can be helpful, as can letting young children handle and count cash and coins to learn their value. Allow kids to pay at the checkout line so they begin to understand that every item has a cost.

Teach kids about ‘need vs. want.’ Needs are things they must have to survive like food and shelter. Wants are things they like having, but can survive without, such as toys, video games, cell phones, and brand-name clothing. Create a budget with them which includes spend, save, and share that they revisit and update regularly to help them decide how to use their money.”

—Kelly R. Oster, vice president, Young Americans Bank

THE FINANCIAL EDUCATOR SAYS…

“From very early ages, kids see parents on their devices and, with a few clicks, items show up at their doorstep. To help kids gain financial intelligence, give them very small amounts of money, starting around age two, to contribute to causes the family is involved in. This sets the habit of giving.

Around kindergarten age, give allowance in the form of money, points, or stickers. The objective is to receive something tangible that can be allocated to spend, share, invest, and save (in jars, for example). Print a picture of items they want to buy, along with the price, to put in the ‘save’ jar.

Allowance should not be tied to grades, discipline, or chores since we all need to take on responsibilities at home, school, work, and in the community without payment expectations.”

—Alex Mazloom, co-founder, Mind Treasures