In this day and age, we often forget to teach our kids the importance of learning how to handle money and how to manage spending. We often give them $10 or $20 here and there as they need it, and we don’t take a second to think about what they might be spending it on, nor do we actually teach them how to properly spend it and to understand how much they have. 

Some parents don’t believe in giving their kids any spending money, and think that their kids should get jobs if they want to spend money. I think that the best way to teach your kids how to handle money is to set up a small bank account for them, where you deposit a small allowance every month that you feel is sufficient. When they are old enough they can have a debit card linked to that account and they can use the money in it as they choose. Be open with them and tell them exactly how much money you are depositing. This way, they gain the skill of managing their money, and learn how to know what they can and can’t afford.  They will also learn how to use a debit card, which is an important skill, as well as learning to take cash out from the bank. Further, it will teach them to plan in advance—sometimes there are things that you can only buy with cash, so they will learn to know when  they do and don’t need cash.

Having the little bit of money will also make them realize how hard it is to earn a living, and how hard their parents work to afford all of the things we can buy. If you are depositing, for example, $50 every month in your child’s bank account, and they buy one drink from Starbucks which is worth around $5, they’ll soon start to realize that money runs out quickly and that they need to be careful of what they are buying and how many.  It will make them think twice about impulse purchases, for now and the future, and will also teach them that if they want to be able to afford things like $5 lattes that they need to work hard in order to afford them!