Here’s what an allowance can teach a child about money management:

1. If you complete your chores, you’ll get some reward. If you don’t complete your chores, you don’t get a reward (no allowance unless chores are completed). This is prep for a future job scenario.
2. If you do an excellent job or extra work, praise is often more of a reward than extra money, but sometimes you’ll get a monetary bonus for doing a super job.
3. You only get so much for your allowance. Begging for more isn’t going to change the amount you get, so you better use it wisely, budget and save for bigger items.
4. Your friends get different amounts for allowance than you do. That’s OK – learn to make do with what you have or let the difference motivate you to be an youth entrepreneur and earn some extra money by running a clever small business (ie. snow shoveling, leaf raking, newspaper deliver)
5. Your wants are always greater than the amount of money you have. Prioritize your wants and save for the big stuff by asking your parents to not give you an allowance for a few weeks (so they save it for you — since you’ll probably spend it if it you have it)
6. Larger things are not necessarily better things. (When I was young after receiving allowances, I’d trade with my younger brothers my nickels for his dimes saying the nickels were bigger, therefore better…. until I got caught).
7. Money doesn’t buy happiness. No matter how much allowance you get/save, the vicissitudes of life continue. Money is a means, not an end.
8. It feels good and secure to have some small savings. Some self-satisfaction for saving your money is a good feeling. Knowing you have options because you have some money to buy a variety of things is great. Not having any money and constantly wanting it not fun.

We bought a Nintendo Wii as an early family Christmas present. Its been TONS of fun so far. Here’s my Wii-learned lessons about money.

1. Get off the couch and play. If you want your finances to be in order, you have to get off the proverbial couch and start actually looking at your numbers. You may hurt for the first week or so while you get used to it, but it’ll be for your benefit.
2. Playing the same game all the time is boring – have some variety and get really good at the games you have. While considering your money you need a budgeting tool (such as CalendarBudget) , diversified investments, bank accounts, long-term goals, etc. You can’t just hide your money in one bank account and consider yourself set. Your options will be limited, and you won’t be where you want to be.
3. Play to win. Financially, set goals and keep working until you meet those goals. If you fall down, get off track, or whatever… get back up, reset and get back on track. Don’t give up until your goal is met.
4. Playing Wii Fit makes you feel good about your self (except when that little animated Wii board says your overweight…. why I otta [shaking fist]….). You feel good because your exercising while playing games. Make your finances like that. Set short term goals you can work towards and celebrate when you achieve your goals. Reward your self with a small treat, or make room in your budget for that next item on your wish list.
5. Sometimes the extra attachments are worth it, sometimes they are not. You can play most games without special attachments and extensions to the regular Wii remote.. but not always. And often, settling for basic remote can make the game less interesting. However, sometimes the accessory extension is just not worth the money.

Who knew the Wii could teach so many things

What have you learned?