What's the best age for beginning an allowance program? In other words, when should kids get an allowance?
Realistically, most kids don't really begin understanding the specifics of money very well until about the age of 6 or 7. For many, this is tied to what they are learning in school. For others, it's just part of their natural development.
Prior to this age, a coin is often just a coin where pennies have the same value as any other coin. And a $1 bill typically has the same meaning to them as a $20 bill. This can be true even if the kids know their numbers.
But if you're willing to really work with your young child, it's like anything else - because kids are such incredible learning machines, you can speed up the development in almost any area you focus on.
And that includes money identification. Of course, there's more to understanding money than just being able to recognize different coins and denominations.
A good rule of thumb is that when a child is old enough to count by numbers other than 1 (say by 10s and 5s) he or she is probably old enough to begin learning to count money and distinguishing different values.
Child Rearing 101
I would never advocate forcing your child to learn something he or she isn't ready for, or to spend long hours hammering home a concept or a subject.
Realistically, in the Pre-K years, their attention span may not be more than 15 or 20 minutes, and besides, 15-20 minutes is more than enough time anyway.
Those short chunks of time can be magical. Whether it's related to reading, math, music, or sport, spending just 15-20 minutes a day practicing or learning something will yield dramatic results in a very short time.
The trick, of course, is finding that right balance. You don't want to be overbearing and push your kids too hard. But you don't want to go to the opposite extreme and sell your kids short by spending zero time preparing them for their own lives.
Be aware that beginning an allowance program with a younger child probably won't help promote money management skills that much simply because he or she just isn't going to have the necessary sophistication to comprehend money's value.
There is no harm in giving allowances earlier - as long as the expectations on what the kids will understand and appreciate is kept in line. Also keep in mind that many of the allowance resources and tips provided on the Money and Kids site likely won't apply to younger kids.
One reason you might consider beginning an allowance program for a younger child is when that child is a younger sibling. This is not necessarily because they'll learn faster (although they probably will) but for a far more pragmatic reason - to keep family peace.
We began giving our son an allowance at the age of four. Obviously, there was no money management at work, no subtleties of saving and budgeting. It was mostly him attempting to ascertain what toys he could buy and how quickly.
But I still think there was a positive psychological component involved in allowing him to experience the power of having money and deciding how to spend it himself.
Watching him stand in front of me in the checkout line at Toys 'R Us, 3 foot tall and change, his Bakugan wallet in one hand and a Ben 10 alien action figure in the other, wide-eyed and heart racing, was certainly cute.
But it was something more than cute, too. It was an early and valuable experience, a first hand taste of independence and empowerment, and a hint of even greater things to come.
"How to Create a Brighter Financial Future for Your Children"