Importance of teaching kids the concept of saving and Money Management
“Money doesn’t grow on trees!” Respect money! Pocket Money for Children, Every 80’s-90’s kid would relate to these patent dialogues that we have grown up listening to so often. Maybe, such was the teaching of our parents that they used to pray and keep money in high esteem. Money isn’t everything but everything needs money! That’s why they knew the value of money and its significance in one’s life. A kid of this era definitely realizes the monetary value of a note but not the sweat and the ordeal gone to earn it.
How to impart importance of money in a kid’s life?
The easiest way for a child to realise the importance of money is to introduce the concept of pocket money. It is the small amount that a child can earn weekly/monthly from parents and the kid can spend as he or she chooses to. As little as Rs 100 a week, or whatever amount the parents deem fit, gives the child the freedom to manage their requirements and wishes. When a kid is financially independent, he/she has the ability to prioritise their needs and retail ideas. Let them spend however they wish to, with parental guidance, of course. Also, conveying the idea of saving is also paramount. The child can be told to save a certain portion to buy something else later on, thus, they learn about waiting for things they want. Such an experiment teaches them to be independent, appreciate the importance of money and value of the things they buy from their own savings. They not only learn and understand about saving and spending but donating too.
It is a helpful way to teach responsibility too. With money comes accountability. When a child is given pocket money, they feel that they are important members of the family as they are provided with a portion of family’s spending money. Let the child make mistakes too, like spending all their hard-earned savings on inferior quality toys or other stuff- it is all a part of the learning process.
How to go about it?
There are no hard and fast rules on how to go about all this and when to start giving children pocket money. A kid as young as 4 or 5 years old can learn to manage money easily. As soon as a kid can realise that it’s important to have money to buy things and save money but not spend it all, he/she is ready to being financially independent.
iNTELLYJELLY recommends a few pointers to keep in mind on how to go about the whole process-
- Fix the amount to be given.
- Pay it on a set date.
- Get some jars or money boxes to help your child divide his money into three- saving, spending & donating.
- If the entire amount is spent, no more money before the set date.
- Teach them the values of different denominations of currency
What all can a child do with his/her pocket money?
There are several points a child should relate his pocket money with-
- Saving for a special game or toy
- Special outings like games parlour
- Gifts for family on special days- birthdays, anniversaries, mother’s day and father’s day
- Comics, magazines, online library (like iNNTELLYJELLY) subscription
There is nothing greater for a family than their child realising the importance of money and valueing it. But, if you want your kids to turn out well let them understand that they need to spend twice as much time with their loved ones and half as much money; and you as parents make sure you have time for them when they do.
Happy saving & happy spending!
Until next time!