Healthy Money Habits for Kids

April is National Financial Literacy Month. There’s no better time than now to instill healthy money habits in our kids, but the old fashioned allowance system needs a makeover for this digitally savvy generation!

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Anton Simunovic, Founder & CEO of ThreeJars.com leads the way with a site that teaches kids how to be responsible with money and opens their hearts to others. Here are some effective allowance tips to get you started.

1. EMPOWER OUR CHILDREN.

Responsible experience is the best teacher, so let our kids practice with real money. Truth is, when the kids spend their money and not ours, they get thoughtful - and fast.

2. KEEP IT BALANCED.

Allot a portion of every dollar your child earns to three jars: one for saving, the other two for spending and sharing. 50% to the Save jar, 40% to the Spend jar and 10% to the Share jar is a good rule of thumb. This establishes healthy money patterns before they leave the family nest.

3. BE CONSISTENT.

Pay the right amount on time! Three dollars may seem trite to an adult, but to a young child, it's their source of independent income. Give allowance the proper respect and attention it deserves. It’s a parent’s best tool to teach kids about money.

4. HOW MUCH.

Consider the age of your child, your expectations of what the allowance will be used for, and what your family budget can afford. Before high school, kids are often paid their age or half their age in dollars per week.

5. EMBRACE TECHNOLOGY.

This generation responds well to the modern uses of technology and it has revolutionized the way they learn. The internet allows kids to connect the dots between earning money, understanding the tradeoffs between spending and saving, and developing a balanced relationship with money by sharing some of it. Tracking decisions gives kids a picture of how money works.

6. ALLOWANCE AND CHORES.

Kids who live in the house, have to help manage the home. That’s what it means to be part of a family – case closed. To ensure follow-through on chores consider revoking TV, internet or cell phone privileges. This way kids are still given the chance to work on their all important money management skills.