- FREDERICK DOUGLASS
Children are the most important part of any society. They are like white slates, whatever you write might get imprinted forever. That is why they are to be treated differently so as to create a happy and prosperous environment for ages to come. As parents, we have a responsibility to teach them many things in life including money management. We also need to enlighten them on finances so that they have good money habits when they grow up. Giving kids pocket money is one way to inculcate good money habits with children. Let's understand how.
Pocket money brings ownership for the money they have and enables them to take decisions, both good and bad, hence helping them to learn. They understand the implication of spending all their money or not spending it at all and saving. It is like giving them the material to build their own castle – they can either build a fancy one or a shabby one.
Giving your kids a regular pocket money enhances their budgeting skills. They understand cash flows – on which date money will come, where it is getting spent, and by what time is the full allowance getting over. They will also know if they are making wise spending decisions. It might take some time but the physical application rather than the theoretical method will make them understand better and would definitely stay for a longer course.
After getting their monthly allowance kids will definitely spend it. But they also will start comparing the cheapest option to buy that particular thing. You can take them to a shop or two and educate them on the deals or savings available at different outlets. Some stores will give more discounts on a products and some will give less discount on the same product. And online may be even cheaper. It will teach them comparing all items before buying which will help them for bigger purchases that they will do when they grow up.
Ask your children to save at least 10% of their pocket money every month. It could be for some bigger cycle or some gadget they wish to own. This will teach them about goal-based savings. It will also form a habit in their minds which will make them save a set percentage from their income on regular basis once they start earning.
There are some things which we should provide to our children like basic necessities of life – food, clothing, etc. But there would certainly be some things which they would very much like to own. It is good to give them gifts on special occasions or their birthdays, but beyond that, if they want to have something you can always ask them to save from their monthly pocket money to get that special thing. This way they will learn to really think if that is what they really want.
Offering pocket money to children is a very debatable topic. Some parents appreciate it and some don’t like it. Every parent has a different way of raising their children. Whatever your methodology may be, you should not miss on teaching money lessons to your children as your teaching will form the very base as they grow and leave your nest.
SINHASI KNOWLEDGE SERIES FOR CHILDREN:
Teaching Children the value and importance of money, investments, and planning
In India, talking money to children is often considered a taboo. But, as parents, we at Sinhasi believe we can be the best teachers about money and its value to our children. This initiative of teaching children about the value & importance of money, investments, and planning has been started by Sinhasi to educate parents as well and kids to encourage parents to start talking and educate their kids about money from a young age so that important disciplines of saving, investing and planning become part of their lives as they grow up and start earning their own money. This is especially important today since spending has become more of a priority than saving which may cause several personal and social problems.
