Allowance Magic

Do you want your children to be financially fit? Would you like to raise a money wizard? A good place to start is by giving your child an allowance. Before I even get into the best way to manage an allowance, let’s start by checking your financial fitness. There’s no doubt kids mimic what they see and their initial attitudes about money come from you. Are your lights or gas constantly suspended due to lack of payment while you sport the latest Gucci handbag or name brand shoes? Did you allow your phone to get turned off ‘cause you’re avoiding creditors? Is Mr. Piggy Bank full in the morning and hungry that night?

Perhaps you’re continuing the verbal legacy of your parents by saying, “Money doesn’t grow on trees!” “Do I look like I’m made of money?” or “Money is the root of all evil.” Well, it’s time to break the cycle.

Sure, many of us have seen or will see hard times in the form of a layoff, reduction of work hours, inability to find gainful employment or a financial emergency. For the rest of us, there are many free credit counseling programs like that can help you manage the funds you have coming in and going out. Developing good financial practices is key.

Money is not good or bad. Money can be used for good or bad. Earning money is key, but don’t you know someone who never seems to have any money and they always seem to be taken care of? They’re most likely implementing the principle of sharing money. Put all illegal methods of obtaining wealth out of your mind; a quick fix today will surely be your doom. What goes around does come back around. But, remember that you don’t have to work hard—work smart.

Wealthy people work smart, putting their dollars to work for them via various types investments. They sprinkle lots of seeds knowing that the yield will be far greater if one sows more seeds. I’m not trying to turn you into Oprah Winfrey overnight because even Oprah didn’t become the Oprah we know overnight. Adjusting the way you feel and think about money is a process. As a result you will change the way you handle money. You will then be able to be an example for your offspring as you strive to raise financially fit children.

What you can do right now

Stop spending money on what you don’t need. You are entitled to treat yourself, but do this after your financial house is in order.

Pay your bills as soon as they come in or make arrangements with your creditors.

Change the way you refer to money. If you talked about a person badly or said she wasn't important, would you expect her to stick around for long?

Give more. If you can donate to a charity that represents a cause you are passionate about, donate! If you’re not passionate about something, get passionate about something. If you are not giving your 10% in church, up your tithing. Money doesn’t have a chance to grow if you are holding it too tightly!
Get a piggy bank for the family and for your child. An old water jug or a vase from the 99 cents store will do fine. Encourage your child to put in this family piggy bank as well as his own and praise him for it.

Give your child an allowance. David McCurrach, author of “Allowance Magic” suggests giving the following allowances:
Spending—Age 3
Saving—Age 5
Sharing—Age 5
Gifts—Age 7
Clothes—Age 9
McCurrach says, “Don’t use these ages as an absolute guide. Think of them more as an indication of when you may want to consider giving additional allowances.” Teach and guide your child early.

Set a goal. If you don’t know where your money goes each month, give yourself an allowance and track how much is being spent on what. Revise this if necessary for the next month and then STICK to your plan. Set a goal to have enough saved up for a family outing or something special for yourself. Start small and you will learn how great of a money manager you can be! Encourage (not dictate) your kids to set goals also. Keep the pressure off—don’t turn this into, “Use your own money to buy your own…!” Provide the essentials and work with your kids to set realistic and sensible goals that fall within your family values.

The real magic to this whole process is that you already possess the ability to change your financial picture and to raise financially fit children. Now step up, take stage, and start wielding your wand!

Wilma Ann Anderson is the Editor-in-Chief and Cofounder of Mahogany Baby. She's also an accomplished singer, and works as a model and film executive. This mother of four has freelanced for ESSENCE and Working Mother magazines, enjoys crafting, and is based in New Jersey.