"What is important for kids to learn is that no matter how much money they have, earn, win, or inherit, they need to know how to spend it, how to save it, and how to give it to others in need. This is what handling money is about, and this is why we give kids an allowance"

Barbara Coloroso emphasizes the vital role of financial education in a child’s upbringing, arguing that the amount of money one has is less significant than understanding how to manage it responsibly. From childhood, lessons about money shouldn’t just be about acquiring or possessing wealth, but should focus on cultivating essential habits and attitudes: spending wisely, saving diligently, and practicing generosity. These form the core pillars of financial literacy that sustain individuals regardless of their socioeconomic status.

Children often observe and internalize attitudes towards money from the adults around them. Giving children an allowance isn’t primarily about providing spending money; it’s an opportunity for practical learning. When children are entrusted with their own money, even in small amounts, they gain firsthand experience in making choices. They must decide what to buy, how much to save for future desires or needs, and whether or not to share with others. Each decision forms a foundation for understanding consequences, delayed gratification, and personal values connected to money.

Coloroso also highlights an ethical dimension of financial education: the importance of giving to those in need. Integral to this is the concept that money is not only a means to fulfill personal wants but also a tool for compassion and social responsibility. By teaching children to allocate a portion of their allowance or earnings to charitable causes, they learn empathy and understand their ability to positively impact others.

Financial literacy is thus interwoven with character development. Through managing an allowance, children learn self-discipline, patience, and philanthropy. These lessons, imparted early and reinforced consistently, prepare children to navigate a complex world where money is an unavoidable part of daily life. By equipping them not just to earn, but to manage and share money wisely, we empower them for lifelong stability and responsible citizenship.