Give Pocket Money To Kids
Should we give pocket money to kids?
This is often a subject for ‘discussion’ in families.
The sooner children start to appreciate the value of money the better.
It is essential children start to learn at an early age the value of their money, including both short-term and long-term saving and budgeting.
Many people believe that that personal finance should be taught in the primary and secondary school curriculum alongside traditional arithmetic.
This training can and should start before children enter schooling.
Parents need to appreciate that introducing the basic principles of money management to kids at home is an important duty. It offers an immediate solution to possible future problems in a real life situation.
If you give pocket money to kids this needs to be introduced in a fun and imaginative way that is likely to inspire children and hopefully, stay with them for the rest of their lives. It should also instill in them the importance of honesty in handling money.
When you give pocket money to kids – and show them the vanishing money side of it - this can open a whole new world for them as they grow older.
To hold their interest and generate enthusiasm, this will need to be done in a fun way and of course depends upon their age.
The following suggestions may be of help when it comes to making the basic economics sink in.
GIVE POCKET MONEY TO KIDS
1. The first lesson is - Money does not grow on trees. Throughout life it needs to earned.
Teaching kids to earn money and manage it well is vital for their success in relationships all throughout their life. Allocate a few simple tasks, depending on the child’s age and capability that are expected to be carried out in exchange for their weekly pocket money. It is important that you stick by this otherwise you will look foolish and regarded as a 'push-over' by your children. Give pocket money to kids on a sound basis.
A young child of four is quite capable of taking clean towels to the bathroom, and other simple fetching and carrying tasks. Make the tasks that have to be done in exchange for their pocket money fit their age group.
Teach your children how to count their money. This is a solid and most important lesson. This will also help them to understand the value of money and what they can do with the money they have. If you give pocket money to kids you will have this the basis for this lesson. You will find it surprising how quickly kids learn to count their money which is a good maths lesson for them.
2. Make a game of shopping. When you are in your local supermarket show the children how goods are priced per gram/lb. Are prices according to specific brands or quantities? Get them to compare these prices and sort out the best buy for you. If you are feeling generous, calculate how much money they will save you and add this saved money to finance a trip out to somewhere special or a special purchase such as the next item. A treat for them. This will answer some of the doubts on whether to give pocket money to kids - it will teach them sound economics
3. For older children, money board games such as Monopoly, probably the best known of all modern board games, are good for instruction. Get them to use the Monopoly paper money as a basis for instruction when you give pocket money to kids.
Monopoly also teaches negotiation. There is even a Liverpool FC edition of Monopoly. To add to the choice there is a Monopoly Revolution – a round white board that boasts an Electronic Banking Unit (battery operated).
These of course, all come at a price, so maybe some saving is indicated here.
4. There is an easy-to-operate saving system for the children – 3 jam jars. One jar for spending, one jar for saving and one jar for charity or a worthy cause. They divide their pocket money this way, then their situation becomes clearer and easier to understand. They need to understand that in this case, they should not rob Peter to pay Paul. When you give pocket money to kids this whole business needs to be taken seriously and treated with sense and respect at an early stage. They can't pop along to the next 'tree' and pick some more money. Also the bank of Mum and Dad has its own strict rules.
Many adults also operate a similar system by emptying out their pocket/purse at the end of each day and putting all the coins under £1 in a jar for ‘emergencies’, such as paying bills.
This jam jar system also teaches children that money needs to be allocated for the different demands on their money. By starting this type of system early it shows children that later in life they must be able to allocate the amount of money they have at their disposal in the correct and hopefully, most intelligent manner.
The question should we give pocket money to kids really answers itself.
5. Open a bank account in their name. The Post Office is a great starter for this type of operation. Make sure they make regular trips to the P.O. to bank the money they manage to save. As they see the total amount rising this should give them the incentive to save more. Also the handing over their money to be banked is a salutory lesson.
6. Children need to learn that there are others in the country/world not as fortunate as them. They have a choice of giving their time, a service or goods (in their case old toys or maybe clothes) to charity. They also need to learn that these items must be in good condition and useable. Charities are not a dumping ground for old rubbish. As they get older, maybe they could baby-sit for free for someone really in need. They need to be over 15 years of age to undertake this responsibility. Please check your local laws.
7. If, at a meal, when the family are hopefully gathered together, this could be a good time to discuss money for kids. Family finances, their money management and future purchases of an item they really want can also be thrashed out here.
Involve the children in this process and they will learn from your, hopefully, wise actions. Whether to give pocket money to kids is a question that answers itself.
8. As well as giving your child pocket money, you need to emphasize that money can make more money. Encourage them to set up their own small enterprise via our FREE book page.
Our book Start A Small Business recommends a business that can be started by older children.
This book gives an example of a small business enterprise that can be set up and operated by a responsible child. Explain the entrepreneurial spirit and how to use money to make money. This is another great gift you can give your children. The full edition of the book is now also available free of charge because of the present bad unemployment figures.
If this is discussed early in life, then later on this will seem a perfectly normal occurrence for them and should make a good financial foundation for them. Depending on their ages, it is also a good time to explain about the perils of credit cards and interest rates.
Tell them to remember the old maxim - 'Never a borrower or a lender be.'
Do not rely on schools to do everything. Finance and money for kids is a very good, appropriate subject to be discussed at home. However, do not burden them with problems in family finances unless it directly concerns them. Children have a way of turning things around in their mind in sometimes inappropriate ways. Therefore do not burden them unnecessarily in their youth.
Not only money for kids, but money for adults as well. Lessons learned in childhood can set up a good basis for future relationships and marriage. Most money habits start from childhood.
One lady, disturbed in her sleep, found her 3 year old daughter sitting up in bed at 4.00 a.m. with the contents of her piggy-bank spread out on the bed in front of her. When asked what she was doing, the little girl said 'Counting my money' as though this was quite a normal process. This young lady now runs her own highly successful business.
If you can teach your child the importance of saving
and the value of money,
this is one of the more valuable gifts you can give.
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