For most kids, money is an abstract concept. They need food, water, clothes and a home, and all those needs are magically already provided for them. And when they want a toy or game, those wants are usually met too.

But they don’t yet have a sense that the money it takes to buy those things, requires work.

That’s why I personally don’t pay my kids an automatic allowance. It takes away the sense of work equalling reward and replaces it with a sense of entitlement, a feeling that they deserve the money no matter what.

But I’m not at all against giving kids money when they earn it.

I think the three most important things to teach kids about money are:

1- You have to work hard for it

2- You usually have to wait for it

3- And you should spend it wisely

And you can do this with these three tools: (more…)