Advantages of pocket money – we teach children how to save money
There are many contentious issues that arise between parents and children, and one of them is pocket money. This is an opportunity for many tedious negotiations and disputes. Kids want to have their money for current whims, and adults are afraid that in this way they will lose control over the expenses of the branch. But pocket money also has long-term consequences, it can teach our children to save money.
When to start giving pocket money?
At first, children don’t understand what money is at all. They see that adults use them to buy various interesting things, but they cannot assess the value of money and its purchasing power. Only around the age of 7, when they can count and add simple numbers, you can start handing them pocket money. Then the child wants to buy it himself. Kids at this age outside of school are under the constant care of their parents, grandparents or babysitters, so all their needs and whims are met by adults, but pocket money at this age already has a strong educational message and should be there.
Pocket money – what amounts should you give?
The amount of pocket money is always adjusted to the financial possibilities of parents. However, this does not mean that for a large-income family, the child should receive hundreds of dollars of money. In determining the amount of this amount, one should exercise moderation so as not to actually lose control over the child’s expenses, e.g. on alcohol or other prohibited substances.
It is a good habit to give pocket money in the form of weekdays, because this is how we gain knowledge about how quickly a child spends money. You can start with really small amounts, e.g. $ 5-10 per week, that’s enough for early school age. When the kids become more independent and can be out of home without our care, the situation changes slightly. There are trips with peers for pizza, cinema, ice cream, etc. Then negotiations usually occur, in which we should keep cool and reasonably calculate the needs of a minor, about $ 40-50 per week. Either way, you can safely say that a reasonable pocket money for a teenager should be a maximum of $ 100 per week.
We teach children to save
Pocket money is an excellent educational tool and it is worth remembering. If we teach a child to analyze their expenses from an early age, there is a chance that they will learn how to make savings and in the future will manage their budget wisely. That is why it is always worth encouraging children to do thoughtful shopping and try to put off a few dollars from each week’s payday. Over time, you can create a junior account for your child to collect their savings from. The motivational system also works well. You can promise your child that if he puts aside e.g. $ 400, we will add $ 100 or finance the missing amount to buy the item for which he was collecting money. Then of course you have to fulfill your promise.
It is also worth emphasizing your satisfaction with the child’s progress and build pride in it that they saved money on their own, e.g. for a new game or skateboard. Such a motivated kid is able to collect a really large sum, but it is important that it is not the same collecting money. A goal is important here, because the child does not have to have money “for a rainy day.” However, he may realize his dream for the amount saved. And in the future this will result in the ability to save money and a mind open to new challenges.