How to Teach Your Kids About Money
Steve Schaffer, CEO of the coupon website Offers.com, created a unique allowance system to help teach his three children, ages 10, 12 and 14, about money.
He and his wife dole out $5 plus 50 cents per year old each child is. (For example, the 10-year-old receives $10.) Then, each child has a quarter of his or her money deducted for “family taxes,” and they have to put 15 percent into a savings account. An additional 10 percent goes toward giving. Each kid can then decide how to spend the remaining money.
“It’s a mechanism for teaching them the value of the dollar so they can decide if they want something or not,” Schaffer says.
Each child can also use the money to purchase lunch at school, although his children always opt to bring food from home instead.
“I can’t remember the last time a child bought lunch,” he says. He estimates that in addition to teaching his kids about money, not paying for lunch will save the family about $5,000 per child through graduation.
Source: MSN Money