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How to Teach Your Kids About Money

What is the right amount of allowance to give my children?

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Janet Bodnar
Kiplinger's Personal Finance Magazine
www.kiplinger.com  

Janet Bodnar is deputy editor of Kiplinger's Personal Finance magazine, for which she has written articles on a wide range of topics, including investing, money management and the economy.

Bodnar is a nationally recognized expert in the field of children's and family finances. Her latest book is Money Smart Women: Everything You Need to Know to Achieve a Lifetime of Financial Security (Kaplan). She speaks frequently on the subject of women and money.

Bodnar's "Money-Smart Kids" column appears regularly in Kiplinger's magazine and at <a>www.kiplinger.com/columns/kids</a>. It was chosen by Moneysmartz.com as one of the top financial columns online. Bodnar is also the kids and money coach on the AOL Coaches site.

Her book Raising Money Smart Kids (Kaplan Publishing) was a finalist in the personal finance category of the Books for a Better Life awards, honoring the best self-improvement books of 2005. It was also a selection of the Washington Post's Color of Money book club.

Bodnar has appeared on Oprah, Today, Good Morning America, The Early Show on CBS, Fox, CNN and PBS. She has done hundreds of radio and TV interviews and appears regularly on WUSA, the CBS-TV affiliate in Washington, D.C., and WTOP, the major all-news radio station in Washington. She is a popular speaker and has been quoted in publications ranging from The Wall Street Journal and Institutional Investor to Parents and Glamour.

Bodnar has been recognized by American University for excellence in personal finance reporting, and by the National Council on Family Relations for her televised reports on children and money. The audio version of her book (read by the author) received three "best of" awards, from Publishers Weekly (business category), Library Journal (nonfiction) and the Audio Publishers Association (educational category).

Prior to joining Kiplinger's, Bodnar worked for The Providence Journal and The Washington Post. She received her master's degree in journalism from Columbia University, where she was also a Knight-Bagehot Fellow in Business and Economics Journalism.

Married, she is the mother of three children.

What is the right amount of allowance to give my children?

In this video, Deputy Editor of Kiplinger's Personal Finance and author Janet Bodnar answers questions on the many issues surrounding what kids should know about money.

This series: 35,485 views

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Speaker: What is the right amount of allowance to give my children? Janet Bodnar: There is no really one right amount of allowance to give your child. Obviously, this is going to vary from a family to family; it's going to vary from depending on where you live and what the cost of living is; what do you expect the kids to do with the allowance, but I will give you some guidelines. Some people recommend, for example, the kids get a weekly allowance equal to their age. Now, what I find from years of talking to parents about this is that they are little bit reluctant to do that with younger kids. They are not sure they want their six-year-old to get six dollars a week. That just sounds like a lot of money for them. What survey show and surveys on this are a little squishy, because people define allowance differently, show that middle school kids get roughly six to eight, maybe ten dollars a week allowance and allowance usually tops out at about $20 a week for teenagers because by that time they have jobs of their own, so parents don't feel like they have to subsidizing with the allowance.

Now, my own personal guideline, the Janet Bodnar guideline is, I think you should start with an allowance, a weekly allowance, that's equal to half a child's age. Now, parents feel much more comfortable with this as far as younger kids are concerned. So the idea of giving a six-year-old three dollars a week or a seven-year-old three fifty a week make sense to them and then again, as the kids get older and their responsibilities get more, you can bump up the amount of that allowance.

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