Do our children have the skills to manage money?
Of course they don't. And that's why it is a good idea to help them learn these skills whilst they are still young and more able to be guided.
Children's first experience of money is usually the fascination with the shiny round coins that dad pulls from his pockets and leaves lying around to be taste tested. We buy kids a piggy bank and encourage them to save their coins (rather than eat them) and of course we encourage them to ask their uncle for the gold ones as they are of greater value, despite the child's belief that the bigger coins are the better ones.
As kids get a little older we introduce them to the concept of value in their beloved collection of coins. As young as 5 years old, children can learn a basic concept of value for money by teaching them that you need money to buy things from the shop. With young children you can help them count out the coins needed and encourage them to hand over the money in order to receive an item. This assists in introducing the concept of value of their coins.
Over the next few years children gain greater understanding of having to save up their coins, make choices about things they want and having to wait for things they want.
Every parent differs in their opinion of what age pocket money becomes appropriate for their child. And thats okay, there is no magic age to introduce pocket money. It is up to you to make the judgement of when you perceive your child is ready to start practicing the skills of money management. And remember, the way to learn these skills is to actually start doing it, of course with guidance.
One of the most common questions asked by many parents is whether children should receive pocket money for every responsibility they hold, or whether they have regular responsibilities and pocket money is given for responsibilities over and above the expected.
Again there is no right or wrong answer. Giving children pocket money for every responsibility they hold encourages the attitude that they should be compensated for their contribution to the family unit. It is important for children to learn that their parents, significant adults in their life like their teachers and eventually the world in general will have expectations of them, and these expectations are not always compensated. It is important for children to learn they they are accountable beings. Doing things for love, self respect and compassion are skills learnt through having expectations placed upon you. Children need to learn that they are expected to do things....because I am your mother and I said so, thats why....not because you will be paid for it....and it makes me happy when you do these things for me. This in turn encourages a sense of self pride and self satisfaction in the child, knowing that the things they do make others happy...and in turn makes them happy too. It is generally considered an admirable quality to perform an action with the best interest of someone else at heart. Refusing to do things unless there is something in it for one's self is not generally considered so admirable.
So how much pocket money should be given? Once again, there is no right answer, but I do think there is a wrong answer. Giving children too much devalues the value of money. When things come too easy we develop the attitude that little effort brings big reward, and if there is no big reward, then its not worth my effort. You're breeding a little capitalist!
It is important to set clear expectations of how children can 'earn' pocket money. You want to drive the concept that money is something to be earnt, and it doesn't come easy. There is an end to their money and therefore thought and discipline is required to manage their money.
Don't bribe children with money.... "if you're a good girl when we go to the Dr's then I'll give you $1". You should have the expectation that they behave, and have appropriate management strategies to address unwanted behaviour. You don't want your child to believe that they should be paid to behave in a way that should ordinarily be expected.
I do believe that children should be able to spend their pocket money on things that are of value to them, not things that are of value to you. They have earnt it. They may make impulsive decisions which they come to regret, but perhaps that's a good thing. The only way they will learn greater respect for the value of their money is to make their own mistakes. And perhaps they don't perceive their purchases as mistakes. Just because you don't value star wars figurines, 125 of them at that, doesn't meant that they don't value them. A balance of independence together with gentle guidance is a great combination...remembering that it is okay to draw the line at 1kg blocks of Cadbury Chocolate for the diabetic child or raunchy magazines for the young teen.
Involve the child in opening their own bank account. Create a sense of ownership for their own account and they are more likely to take pride in building the bank balance. Some parents offer incentives such as matching the child's savings. This provides further incentive for the child to save which in turn assists in developing self discipline skills, goal directed behaviour and acceptance of delayed gratification. Be careful, they may have you working double time to keep up your end of the bargain.
So whether it's a good or bad thing, there are no definite rules to introducing money to children. What we do know is that early introduction in an appropriate manner can assist in helping the child learn long term skills in managing money, an integral part of everyday life. Nurturing these skills also assists in the development of healthy attitudes and behaviours that shape our personality and perspectives in life...hopefully for the better.
Kurly K
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