By Marli Naidoo
When we realise that we are busy preparing our children for adulthood every day, we will begin to understand the importance of financial guidance and independence. As soon as a toddler can count, he can begin to manage his coins (with his parents’ guidance).
Pocket money is definitely one of the best tools that you can use to teach your children the connection between work and money: they are paid for what they do. They learn that they have the power to spend their money but that once they have spent it, they cannot get it back. Something else your children can learn through having their own funds that they can manage, is to save for something they want very much. Another valuable lesson is how it feels to pay back money borrowed from their parents. This part isn’t always nice. You could even charge a small percentage interest.
In some families children are paid for everyday chores, while other parents offer no pocket money for performing household tasks. Children younger than eight years should preferably not have to work for their money. They could in any case be expected to help mommy about the house. The pocket money is given apart from this help. Stick to a fixed amount and preferably pay it weekly.
Children older than eleven can do extra work for extra money. These tasks also give your child a wonderful opportunity to learn new skills. Let them help in the garden, changing the wheel of a car, mowing the grass, painting a wall, or repairing something that is out of order. This pocket money can be paid monthly so that your child can learn to plan.
Older teenagers can learn to pay for their own clothes and recreation. This will teach them financial responsibility, planning and the value of a budget. You will be surprised to see how responsible your teen can be. Ten to one he will not blow all his money on the first day but handle it sensibly. In this way he will also learn about the difference between needs and desires.
Encourage him to save 10% of his money. He can open a savings account at a bank and deposit his money in it.
Teach him about charity. He can spend a small amount every month to help animals or people in distress.
The brain teaser, however, is: how much pocket money? Each family differs with regard to what they can give their children. Base your decision on what your child is supposed to do with his money and calculate the amount according to that. A six-year-old is going to buy a few sweets or a toy, while a teenager has more responsibilities and expenses.
Just remember that your child does not have to get the most pocket money in his circle of friends. There will always be somebody who earns more or less than him per month. Base your decision on your child’s needs and your family’s income.