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Not sure how to save money? Start with an allowance

 

You need money to make money, so where do you get your first dollar? If you're one of the lucky ones who get an allowance, congrats! Saving part of your allowance is an easy way to get started on the road to financial freedom.

So how much should you save? Depends on your short, medium and long-term goals. If you have a short-term goal of saving $100 and get $10 a month for allowance it will take you 10 months to reach your goal. Maybe saving ALL of your allowance is not practical, so it might take you a little longer. Whatever you get, here are two things you can do to maximize the power of your allowance…

Ask for a raise

Just as adults do with their jobs, you can ask your parents for more money—but you better have a good reason ready. "Hey Mom, I’ll add a few chores to my list if you can up my allowance by $5/week" is a lot more effective than "Hey Mom, I need more money."

Spend, save, share

Before you get your allowance, decide ahead of time how much you're going to spend, save, and share, and have containers for each. If you can decide before you get your allowance how to divide up your money then your chances of meeting your goal of saving $100 will happen in no time. Just make sure you get the cash in your savings container into a savings account at a bank or credit union ASAP.

No allowance? Well, have you asked for one? Nicely, with 'please.' Here's a way to ask for an allowance that will help get results…

Dear [fill in the blank]
I'm starting to learn about money and how to become financially independent. Please consider offering me a monthly allowance. An allowance will help me reach my short-term goal of saving $100 in 10 months.
Sincerely,
[fill in the blank]

If you try this approach, but an allowance is still not possible for your family's budget, don't give up. There are other ways to get money—stay tuned!

TRY THIS: Write that letter either requesting an allowance or an increase…and be prepared to justify your request.

Follow our Financial Literacy Month series to get financially fit in just 30 days.

James McKenna and Jeannine Glista  are the co-creators of Biz Kid$, a national financial education initiative based on the award-winning public TV series. They also are the authors of the seriously smart new book How to Turn $100 into $1,000,000 (out this month from Workman Publishing, $13), which outlines in detail every step you need to take to make your million. 

 

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by GL | 4/7/2016
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