Discuss pay for doing extra chores, such as cutting the lawn or washing windows, especially if the child is saving for a big item. Establish rules for what to do about lost allowance money. Only money for necessities should be replaced. Allow children to negotiate a raise in their allowance. Parents can help their children develop positive attitudes about money.
Children can learn how to plan their spending to meet needs and financial goals.
The first-hand experiences that children have in managing money provide valuable learning. When a parent is too quick to bail a child out of financial trouble, the child does not learn the consequences of over spending. Young people who have money management skills are more likely to be able to handle adult financial decisions such as purchasing insurance, using credit wisely, paying taxes, investing and saving for retirement plans. Parents and teachers who encourage good financial skills are helping young people avoid potential financial problems as adult. One of the best money management is to develop a budget.