Pocketmoney

Lessons for teaching children about money

I read this post from Michael Karnjanaprakorn about he handles his girl's allowance.

I think there are some great ideas, that I am taking for Lucas' and Nico's pocket money in a few years:

• How to set the allowance: weekly, 1€/year. i.e: 10 years, 10euros/week.
• Compounding: set an interest rate on savings, i=10%/year. This teaches them about compunding.
• Doubling savings: every year if savings are over 50€, double it to reinforce patience and savings.

This will need a spreadsheet, another great skill to teach.

A thoughtful and great approach on how to handle finance skills and allowance.