For children and adolescents, pocket money is often the only money they can spend. Children use pocket money in different ways. While some spend it as soon as they receive it, others save it for months. Some are always short of money, while others ration it according to their needs.
Pocket money is more than just spending money. You can use it to teach your child many invaluable lessons.
- Value of money: Through the various things the child buys, he gets a sense of how expensive it is to live within a budget
- To make their own decisions: Money can buy a lot of things. By deciding what to purchase and what not to, your child learns to be discerning
- Delayed gratification: By learning to save, a child can learn not to give into impulses, be patient and think ahead
Tips for parents
Your child is not the only one who can learn restraint while handling money.
There are many things parents must keep in mind while handing out pocket money.
- Always pay on time and regularly so that the child can plan accordingly. Do not make your child beg.
- Do not use pocket money as a reward or punishment. Hand it out regardless of whether your child was good or bad.
- Give your child the freedom to decide what he wants to buy with his pocket money. Experience is the best teacher.
- Do not give too much! When presented with excessive sums, the child loses focus.
- Never hand out a little ‘to help’ your child if their pocket money runs out. If broke, let them wait for the next instalment. Offer suggestions on how to prevent an ‘emergency’ situation from recurring.
- The most important rule is that spending money is not an educational tool! The child learns valuable lessons subtly.
- Do not make value judgments about what your child buys with the money. They do not need to spend it on ‘useful’ or ‘essential’ things.
How much should you give?
Your child should get his first pocket money at age four or five. Start with small sums, perhaps Rs 10 a week. Continue with weekly payments will age 9. Children under ten find it very difficult to plan for an entire month. After age ten, switch to monthly payments. Now it’s about time your child learnt financial organisation. Discuss your child’s pocket money with him/her. Also find out how much spending money your child’s peers get.