Pocket Money & Your Child- 5 Do’s and Don’ts
Created by Swapna Nair Updated on Jun 08, 2020
Parenting is always about debates and conflicting opinions, and some aspects are subject to more debates than others. Giving your child pocket money is one of those. Should I give my child pocket money? How much? When should I start? These are perhaps some of the questions that run through your mind. Pocket money allows your child to learn by doing. While money in one’s pocket is empowering, giving pocket money depends on your financial circumstances and values.
When Should I Start Giving My Child Pocket Money?
Before you start, ask yourself these questions.
- Does my child understand that money is necessary to buy the things she owns?
- Does she understand what it means to save and not spend money all at once?
If the answer to both is yes, then you can start! Starting too early with pocket money can result in your child not valuing money. She might just think that she can get money any time for no reason. Age 8 to 10 might be a good time to start giving your child pocket money.
Things To Keep In Mind About Giving Your Child Pocket Money
If you’ve decided to give your child pocket money, here are few things to keep in mind.
- Plan: Before you start doling out, make a planner along with your spouse – how much to give and how often to give. If you think your child is not ready (see above for When Should I Start) by all means delay it by a few months, or a year
Teach: Choose a good family time to talk, maybe after dinner or during the weekend.
- Teach your child the value and importance of money. A younger child can be taught through a story
- You can discuss the recent demonetization with an older child
- It is a good idea to take your child along when you go for your next grocery shopping trip, and also plan a visit to the bank together so that he understands ‘how money works’
- Don’t give pocket money for chores such as making the bed, or clearing up dishes. These are essential chores that everyone in the family does, and your child must not expect to get an incentive for doing them
- Savings: You could start off with a piggy bank and graduate to a savings bank. Most banks have interesting schemes to motivate children. Here’s a little ‘savings game’ for your child – I call it the 3 glass jars. Ask them to save money in the 3 glass jars; they put 50 percent of their pocket money in one, 40 percent in the next one and 10 percent in the last one. The money from the first jar (50 percent one) is for spending on their needs and wants. The one in the second jar (40 percent) should go into savings and the 10 percent jar is for charity. This way you are teaching your child how to budget and how to part with their money for a good cause
Supervise: You must allow your child to decide what he wants to spend on, but also keep an eye on it.
- Your role here is to help or guide when required. Do not nag him about his choices
- Your child will make mistakes, and that’s all right! Allow her to learn from their mistakes
- Set the rules: Do not go beyond the budget and frequency that you have chalked out in the beginning. If your child overspends or loses money, allow her to face the consequences. Do not help out by doling out more, in such cases.
The most important thing that you can teach your child is to ask himself before spending: Do I need it or do I want it? So, give your child a taste of the real world by starting him on pocket money, but do ensure he learns to use the money wisely and to know that it is a means to an end, and not the end itself!
Did you find the tips shared by Swapna Nair useful? Have you started giving pocket money to your child yet? If yes, how do you ensure that your child spends the pocket money wisely? Do share in the comments section below – and help other parents take the right decisions at the right time!
| Oct 24, 2017
No, I haven't started giving pocket money to my child as yet, but I plan to do so by the time she is 10 years old. I am quite sure this Mantra 'Do I need it or do I want it?' would help her decide how to make judicious use of money.. also the saving formula of 50%,40% and 10% would do wonders.. thanks Swapna Nair Ma'am for sharing this wonderful blog with amazing tips.