When it comes to deciding about pocket money for your child, many parents have mixed feelings about it. Some agree on giving while others ignore the notion saying, why in the first place does a child even need money for?
However, pocket money is a great tool that teaches money skills in children and helps them realize the value of money and how to save it. It makes them aware of the concept of financial independence, management, decision making power and saving.
When to start pocket money?
When your child starts giving cues like getting excited at the sight of money, asking for handing over the money himself to the shop keeper, understanding that we need money to buy things, asking for a wallet and stuff like that.
How much to give?
Every family has its own affordable limits and financial constraints. While deciding on how much to give, you should keep in mind your expectations about where will the child be spending it and obviously what age is your child. Younger kids don’t have many demands and thus it is wise to start from low and then increase as they grow up.
How to teach them about spending it wisely?
You can always provide them with a list of the things that their pocket money covers. I would encourage mine to spend on story books/ activity books.
Any adventure outing or gaming zones
Gifts for siblings
A special toy or game
Any sports item
You can also ask them to save their money to buy a bigger item that they have their eyes on.
Apart from this, you should reward them for any chores that they help you with around the house. It will encourage them to earn with hard work.
How to save money?
Give them a money box or make one with them at home. Also, make another one and label it as a charity box. The earlier they learn about this concept, the more they will donate in future.
Make sure that for extra money, they will have to do some easy chores around.
Fix a date for giving the pocket money.
Ask them about their plans regarding their pocket money.
Advise while being friendly and give options.
How early did you start pocket money for your child?