When children are young, it's easy to place birthday money in the bank for them to have when they are older. But this practice doesn't need to be abandoned when your kids are old enough to notice the $10 bill inside the birthday card. Instead of allowing children to spend all the money they receive or earn, require them to split their money three ways: a third for a college fund, a third for a savings account, and a third for spending. Children will quickly learn to spend wisely with what money they do have, or they'll be disappointed with the results.
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