Transcript:

Many children first learn the value of money by receiving an allowance. The purpose of an allowance is to teach children about money. Children can learn how to manage money, especially at an early age, when financial mistakes are not very costly.

The amount of money that parents give to their children to spend as they wish differs from family to family. Timing is another consideration. Some children get a weekly allowance. Others get a monthly allowance.

Parents should make clear what, if anything, the child is expected to pay for with the money. At first, young children may spend all of their allowance soon after they receive it. If they do this, they will learn the hard way that spending must be done within a budget.

Parents are usually advised not to offer more money until the next allowance. The object is to show young people that a budget demands choices between spending and saving. Older children may be responsible enough to save money for larger costs, like clothing or electronics.

Many people who have written on the subject of allowances say it is not a good idea to pay your child for work around the home. These jobs are a normal part of family life. Paying children to do extra work around the house, however, can be useful. It can even provide an understanding of how a business works.

Allowances give children a chance to experience the things they can do with money. They can share it in the form of gifts or giving to a good cause. They can spend it by buying things they want. Or they can save and maybe even invest it. Saving helps children understand that costly goals require sacrifice: you have to cut costs and plan for the future. 

Vocabulary bank:

Value - noun relative darkness or lightness of a color; the quality (positive or negative) that renders something desirable or valuable; a numerical quantity measured or assigned or computed; an ideal accepted by some individual or group; the amount (of money or goods or services) that is considered to be a fair equivalent for something else; (music) the relative duration of a musical note; verb fix or determine the value of; assign a value to; estimate the value of; place a value on; judge the worth of something; regard highly; think much of; hold dear

allowance - noun the act of allowing; a permissible difference; allowing some freedom to move within limits; an amount added or deducted on the basis of qualifying circumstances; an amount allowed or granted (as during a given period); a sum granted as reimbursement for expenses; a reserve fund created by a charge against profits in order to provide for changes in the value of a company's assets; verb put on a fixed allowance, as of food

financial - adj. involving financial matters

costly - adj. having a high price; entailing great loss or sacrifice

Timing - noun the regulation of occurrence, pace, or coordination to achieve a desired effect (as in music, theater, athletics, mechanics); the time when something happens

consideration - noun a considerate and thoughtful act; kind and considerate regard for others; the process of giving careful thought to something; a discussion of a topic (as in a meeting); information that should be kept in mind when making a decision; a fee charged in advance to retain the services of someone

receive - verb convert into sounds or pictures; receive a specified treatment (abstract); regard favorably or with disapproval; accept as true or valid; partake of the Holy Eucharist sacrament; express willingness to have in one's home or environs; get something; come into possession of; have or give a reception; bid welcome to; greet upon arrival; register (perceptual input); go through (mental or physical states or experiences); receive as a retribution or punishment; experience as a reaction

budget - noun a summary of intended expenditures along with proposals for how to meet them; a sum of money allocated for a particular purpose; verb make a budget

advise - verb inform (somebody) of something; give advice to; make a proposal, declare a plan for something

demand - noun the act of demanding; an urgent or peremptory request; the ability and desire to purchase goods and services; required activity; a condition requiring relief; verb request urgently and forcefully; claim as due or just; ask to be informed of; summon to court; lay legal claim to; require as useful, just, or proper

saving - adj. characterized by thriftiness; bringing about salvation or redemption from sin; noun recovery or preservation from loss or danger; an act of economizing; reduction in cost; the activity of protecting something from loss or danger

electronic - adj. of or relating to electronics; concerned with or using devices that operate on principles governing the behavior of electrons; of or concerned with electrons

experience - noun the accumulation of knowledge or skill that results from direct participation in events or activities; the content of direct observation or participation in an event; an event as apprehended; verb go through (mental or physical states or experiences); go or live through; undergo; have firsthand knowledge of states, situations, emotions, or sensations; undergo an emotional sensation

gift - noun something acquired without compensation; the act of giving; natural abilities or qualities; verb give as a present; make a gift of; give qualities or abilities to

cause - noun a justification for something existing or happening; events that provide the generative force that is the origin of something; any entity that produces an effect or is responsible for events or results; a series of actions advancing a principle or tending toward a particular end; a comprehensive term for any proceeding in a court of law whereby an individual seeks a legal remedy; verb give rise to; cause to happen or occur, not always intentionally; cause to do; cause to act in a specified manner

invest - verb make an investment; provide with power and authority; furnish with power or authority; of kings or emperors; place ceremoniously or formally in an office or position; give qualities or abilities to

sacrifice - noun (sacrifice) an out that advances the base runners; the act of killing (an animal or person) in order to propitiate a deity; personnel that are sacrificed (e.g., surrendered or lost in order to gain an objective); a loss entailed by giving up or selling something at less than its value; the act of losing or surrendering something as a penalty for a mistake or fault or failure to perform etc.; verb kill or destroy; make a sacrifice of; in religious rituals; endure the loss of; sell at a loss

future - adj. coming at a subsequent time or stage; (of elected officers) elected but not yet serving; yet to be or coming; effective in or looking toward the future; a verb tense or other formation referring to events or states that have not yet happened; noun bulk commodities bought or sold at an agreed price for delivery at a specified future date; a verb tense that expresses actions or states in the future; the time yet to come