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How to teach a child to spend their allowance wisely? Practical Advice.

Reasonable spending, while easy in theory, is not the easiest thing to do. Many American adults have difficulty setting aside funds for the future or important investments, or what happens often, a sudden event that causes sudden spending.

Some assume that instead of living economically, they prefer to simply spend their paycheck on various whims, which very often results in the lack of even a small amount at the end of the month. Unfortunately, the reason for such an approach very often lies in the lack of practical planning and management skills. This skill is an activity that, unfortunately, is not taught in school, hence the main responsibility rests with the parents. Financial education of children is extremely important as it greatly facilitates their start into adult life. That is why it is so important for parents to teach their children how to spend money efficiently from an early age.

Problematic financial education 

Some parents are convinced that children’s words and financial education do not go hand in hand. After all, why educate your child about finances when they still have time, right? Unfortunately, this approach may do more harm than good to our children in the future. The reality also leaves no illusions in this matter – financial education. This is evidenced by the fact that even adults do not know basic concepts such as net and gross or have no idea about taxes. Worse, a substantial part of adults does not know how to manage their money responsibly. By teaching our children bad financial habits or by not making any attempts to learn about the value of money or ways to save, we do them a lot of harm.

Planning – why is it worth teaching a child?

We already know how important the financial education of the youngest is. Thanks to it, we teach the child to respect money and work itself. Therefore, it is always worth starting to pay attention as early as possible that the child’s favorite toys, games, or clothes do not come out of nowhere, and to obtain them, a certain amount is necessary. It is also worth informing the toddler about where mom and dad have money for various types of purchases or gifts – through work or regular savings. And yet there is college ahead of them, specialized studies, and finally the cost of living. 

Ways to teach your child to spend money efficiently

While teaching a child to manage their money well may seem very complicated to some parents, with a little patience and determination, it will start to work. Remember that you do not need to be an expert in this field to teach your child to raise funds for whatever other expenses. As in many other areas, this is invariably the best way to acquire skills is to learn through play. In the case of younger children, it can be popular children’s play in running a shop. For older children, Monopoly board games are great, allowing them to have specific amounts of money and decide how to use them.


Allowance is a problematic issue for many parents. Some have doubts, believing that through allowance a child will learn that he can get money for nothing and not manage it skilfully. To avoid such a situation, it is worth discussing it in an appropriate way depending on the child’s age, presenting what the idea of receiving allowance is, and, above all, setting the conditions on which the child will receive it.

Another alternative solution, which also teaches how to raise funds, is to give the child an opportunity to earn money, e.g. by performing additional work adapted to their age. However, it is worth remembering not to reward your children with money for basic activities that are part of their duties, such as keeping their room clean, doing homework, or brushing their teeth. It is worth explaining that the child can spend the received amount immediately on small items, but they can wait and raise a larger amount of money to buy, for example, a dream toy. 

Learning to control expenses with Fin4Family

There are also other, more modern ways to introduce your child to the world of finance. One of them is the Fin4Family app, which is especially suitable for older children who have access to a phone or computer. It is worth getting acquainted with the features that this application offers. Planning expenses and controlling them with the Fin4Family app is extremely simple and convenient and can be a very good way to introduce your child to the world of finance.

Its installation and use are extremely simple. Fin4Family is a great way to control your expenses not only by adults but also by children. Fin4Family allows you to add a separate account where your child can monitor their expenses and track the progress if they manage to save a certain amount of money. What’s more, your child can update information about their monthly or weekly expenses. This will allow your child to pay attention to what they spend the most money on. It is also a great solution for a parent who will be able to quickly notice if their child is developing bad habits regarding money management.