To reinforce putting money in “concrete” terms for kids (See Money Note Tip #1), giving them an opportunity to test their budgeting skills – with your help – at the right time is key. 

Tip #2 – Privilege, not punishment – it’s all about timing

Each spring and fall, my girls get a clothing budget in CASH. Cash and a budget are concrete. I started this when the girls were fairly young, and they saw this outlay of cash as a privilege. Waiting too long can make it feel more like punishment when you go from freely covering all expenses to putting them on a budget.

My cousin’s daughter headed to college a couple years ago.  To help her understand what it will be like to live on her own money and not her dad’s, I suggested he give her three months of cash to live on the summer before heading off to college. They had a conversation about her expenses and she got a lump sum at the beginning of June, then no more until the beginning of September. His daughter kept her receipts, and they reviewed her budget monthly. Then, they used that summer’s experience to determine how they would handle money during her first semester at college.

She saw the trial run that summer as a privilege since it was used to prepare her for the fall. If he had waited until the fall and then cut her off, she would likely have perceived this as a punishment. Timing is everything with kids, so remember to watch for the window of opportunity when they will view managing their own cash as a privilege.

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Written by Susan Beacham
Susan Beacham founded Money Savvy Generation in 1999 after almost two decades in private banking and investment management complemented by considerable time teaching at the elementary level.

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