The upcoming holiday shopping season is not only a great time for kids to learn to save to buy presents for others, but it is an opportunity for them to learn a valuable life lesson. To learn more about teaching money skills for the holidays (and years to come), we chatted with Allowance Manager CEO and founder Dan Meader who believes that kids as young as seven years old can learn about the value of money, allowing them to save up to afford all their holiday purchases. Check out our interview below to learn more about how to raise financially savvy kids.
Momtrends: How can parents start to teach kids the value of money?
Dan Meader: The only way to give kids the ability to understand the value of money is to provide them with an allowance so they can experience using it. Children need to get that firsthand experience by using their own money to buy things they want, which helps them to understand that money is a very tangible and real part of life. This experience coupled with parents talking to their kids about how to manage their money proves to be the strongest education tool for children and their financial literacy.
Momtrends: What age do you recommend that parents start giving an allowance and why?
Dan Meader: We have found that at about age 6 kids start to understand the concept of money.
Momtrends: What tasks should an allowance be given for?
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Dan Meader: If parents choose to tie allowance to chores, such as taking out trash, feeding the dog, making the bed, doing homework or setting the table, then children in effect have a choice whether or not to do chores. If kids decide the return is not appealing enough for them, they may opt out of chores. I parents choose to give an allowance without requiring kids to do chores to earn it, they can still reward their kids for extra things such as washing the car or mowing the lawn.
Momtrends: How can your site help parents with setting up an allowance?
Dan Meader: Parents can use Allowance Manager to set up automatic deposits of kids’ allowance into their accounts. This allows for kids to use their prepaid debit card, called an AllowanceCard, to get experience using money in a very safe environment when the risk is low. Both parents and kids can view their virtual allowance tracker through the Allowance Manager app, which provides an overview of all transactions made with kids’ allowance. The AllowanceCard helps parents give kids the ability to use actual money in the real world.
Momtrends: How did the idea come about?
Dan Meader: Our company was created to fill a void in our own family. Our children were finding us forgetful when it came to giving them their allowance, and they were forced to ask for their own money, which created mistrust between us. My sons thought up the idea for Allowance Manager and asked me to create the program using my engineering background. Allowance Manager solved the problem automatically and seamlessly so that we were able to help 200,000 other families across the U.S.
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