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Teach Budgeting Techniques
The "envelope system" is an easy way for children to understand how to budget money, Thomas says. You give your child several envelopes to store his cash allowance in, each designated with a specific goal in mind. "We set it up so 10 percent of their allowance or money they have goes into the savings [envelope], 10 percent into investing, 10 percent into charity and the rest they get to use," Thomas says.