Parents often come to me and they say, "What's a great time to start giving my child an allowance?" Children, by the age of 8-years old, do understand the concept of money. Giving a child an allowance is a great way to help them understand the meaning and the value of money, to help them budget and to help them learn how to save and save their money for charity. When children have an allowance, sometimes parents decide to pair it with the completion of different chores. Parents often ask, "Well how much should the allowance be?" Again, this completely depends on your family circumstances and what your family values are. But a child as young as 8-years-old can begin to manage small amounts of money.
It's important for parents to remember that they are teaching a lesson by giving the allowance. So if you provide your child with this money, you should let them spend it in the way that they see fit. If you give your child a certain amount of money, the child should be allowed to use the money on whatever they want to purchase. If they make inappropriate purchases, then this is the teaching moment in which the family can sit down and discuss how things were spent. Giving a child an allowance is a wonderful way to help them understand the meaning of money, the value of spending and saving, and how to earn and save.