The LearningCents Bank -- Frequently Asked Questions
At what age should I start teaching my child about money and giving them an
allowance?
Children start with the “I wants” at a very young age. When they are 4 or 5 years
old, parents can begin to assist children in differentiating their wants versus needs.
Children can begin to make spending, saving and giving choices as you introduce
them to basic money concepts.
How much should a child receive for an allowance?
A general rule of thumb is $1 for each year (e.g. a 6 year old gets $6.00). With the
LearningCents Bank, your family needs to allocate the amount of money the child
deposits into their SPEND, SAVE and GIVE compartments.
How do we decide how to allocate the allowance into the 3 money choices?
Have your children use the LearningCents Bank to allocate their money into SPEND,
SAVE and GIVE. Your family's money values will determine how you weigh these
amounts. We found it simpler to work with dollar increments, however, you may
split the money in any way you choose --- just use the same allocations each week.
For Example:
Option 1 places more emphasis on spending choices, while Option 3 fosters saving
for the future.
How often should I give out allowance?
We support paying children on a weekly schedule. This regularity helps reinforce
that money is a part of our everyday lives and it comes in a predictable way, like a
paycheck for an adult.
Why should we give an allowance? Our children get whatever they want!
We think that giving children a steady “ income” with regular payments will give you
an opportunity to pass on the money values you want to instill. We hope you will
give them the gift of learning to be smart shoppers, good savers and contributors of
the community
Should an allowance be “given” or “earned?”
Some experts believe that allowances are given, so children have their own money
to learn to manage. Others believe in teaching the additional value that children
should learn-to-earn by fulfilling household responsibilities. In creating a connection
between doing and earning, keep responsibilities age-appropriate (e.g., take out
trash, put clothes away, keep room clean, set/clear table, feed pets). You may
need to remind your children of their responsibilities to help them be successful.
What if my child doesn’t have enough money in their SPEND section to buy what
they want?
Your child will need to wait until he has added enough to the SPEND section to reach
his goal, and not “borrow” from the SAVE or GIVE, nor borrow money from you.
Waiting is how children learn a ”pay-as-you go ” philosophy. This is a critical
financial lesson to learn at an early age.
How do we treat sources of money other than allowance?
Your child may receive money for birthdays, holidays or other special occasions.
They may also earn additional money through extra chores or jobs. Think about how
that money is handled: does it all go into their SPEND account or does it get split
into SAVE and GIVE as well? Your family should discuss this and then be consistent
with how or whether you divide it up.
What do I do if my child wants to use the spending money on something that I
think is a waste of money or something they don’t need?
As a parent, you become the coach and not the “nay-sayer”. Children will make
many mistakes, such as buying poor-quality products or toys that looked better on
television than at home. You may offer one or two unsolicited comments, but leave
the final decision to your children. Learning through trial and error on relatively
small dollar purchases will ultimately teach our children to be smart consumers on
their big ticket items.
allowance?
Children start with the “I wants” at a very young age. When they are 4 or 5 years
old, parents can begin to assist children in differentiating their wants versus needs.
Children can begin to make spending, saving and giving choices as you introduce
them to basic money concepts.
How much should a child receive for an allowance?
A general rule of thumb is $1 for each year (e.g. a 6 year old gets $6.00). With the
LearningCents Bank, your family needs to allocate the amount of money the child
deposits into their SPEND, SAVE and GIVE compartments.
How do we decide how to allocate the allowance into the 3 money choices?
Have your children use the LearningCents Bank to allocate their money into SPEND,
SAVE and GIVE. Your family's money values will determine how you weigh these
amounts. We found it simpler to work with dollar increments, however, you may
split the money in any way you choose --- just use the same allocations each week.
For Example:
Option 1 places more emphasis on spending choices, while Option 3 fosters saving
for the future.
How often should I give out allowance?
We support paying children on a weekly schedule. This regularity helps reinforce
that money is a part of our everyday lives and it comes in a predictable way, like a
paycheck for an adult.
Why should we give an allowance? Our children get whatever they want!
We think that giving children a steady “ income” with regular payments will give you
an opportunity to pass on the money values you want to instill. We hope you will
give them the gift of learning to be smart shoppers, good savers and contributors of
the community
Should an allowance be “given” or “earned?”
Some experts believe that allowances are given, so children have their own money
to learn to manage. Others believe in teaching the additional value that children
should learn-to-earn by fulfilling household responsibilities. In creating a connection
between doing and earning, keep responsibilities age-appropriate (e.g., take out
trash, put clothes away, keep room clean, set/clear table, feed pets). You may
need to remind your children of their responsibilities to help them be successful.
What if my child doesn’t have enough money in their SPEND section to buy what
they want?
Your child will need to wait until he has added enough to the SPEND section to reach
his goal, and not “borrow” from the SAVE or GIVE, nor borrow money from you.
Waiting is how children learn a ”pay-as-you go ” philosophy. This is a critical
financial lesson to learn at an early age.
How do we treat sources of money other than allowance?
Your child may receive money for birthdays, holidays or other special occasions.
They may also earn additional money through extra chores or jobs. Think about how
that money is handled: does it all go into their SPEND account or does it get split
into SAVE and GIVE as well? Your family should discuss this and then be consistent
with how or whether you divide it up.
What do I do if my child wants to use the spending money on something that I
think is a waste of money or something they don’t need?
As a parent, you become the coach and not the “nay-sayer”. Children will make
many mistakes, such as buying poor-quality products or toys that looked better on
television than at home. You may offer one or two unsolicited comments, but leave
the final decision to your children. Learning through trial and error on relatively
small dollar purchases will ultimately teach our children to be smart consumers on
their big ticket items.
6 YR OLD Spend Save Give 10 YR OLD Spend Save Give
OPTION 1 $4 $1 $1 OPTION 1 $7 $2 $1
OPTION 2 $3 $2 $1 OPTION 2 $5 $4 $1
OPTION 3 $2 $3 $1 OPTION 3 $4 $5 $1
OPTION 1 $4 $1 $1 OPTION 1 $7 $2 $1
OPTION 2 $3 $2 $1 OPTION 2 $5 $4 $1
OPTION 3 $2 $3 $1 OPTION 3 $4 $5 $1
