Children and Pocket Money

Is there an age to introduce children to money? What is the practice these days? In our days – it was not the pocket money as much as the attraction of piggy banks and the importance of saving money.

While I see the need of colorful piggy banks which make noise as an absolute must, when does one start the concept of pocket money? Is there a right age to do so assuming that basic familiarity with Math and monetary concepts has been introduced?

The larger question is – do we just give them pocket money or do we link it to some chores accomplishment or behaviors or as a reward for academic and extra-curricular excellence?

I would tend to lean towards the need for them to understand the concept of giving services.

In their case it could be just doing simple tasks at home which entitle them to earn pocket money. More contribution and help in the house means more pocket money and also hopefully will make them more responsible.

I am sure all of you would agree with me for the need to make children more aware of discretionary spending – whether it is getting a treat or a toy or a book or maybe even contributing for the underprivileged sections of society.

Will this help in them gaining financial prudence? I certainly hope so.

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2 thoughts on “Children and Pocket Money

  1. Please be careful if you use money as a reward for service! Children have to learn from their parents as role models to serve others out of love and not for any monetary, honour or other gratification! Otherwise they may start to hate to serve others when they do not get money or respect. Life will become meaningless and a burden for the child when he/she grows up if he/she does not know how to lovingly serve others!

    Learning to handle money by kids can start with savings in a piggy bank to be transferred regularly into a bank and then invested. The kid should be involved in every aspect including going to the bank and then with the investment.

    Regarding the time to start giving pocket money, do consider waiting till the child asks for it. The amount that you give has to be mutually agreed upon after a good discussion whenever the child wants it or wants an increase in it! The pocket money should not have any strings attached by the parents and the discretion of its usage should be entirely left to the kids! Parents can be role models and can give suggestions only! So, if the parents are giving to charity, let the child know about it but not force the child to give to charity a certain percentage as they may be doing!

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