Every parent should teach their children financial responsibility, and one of the ways is to give them pocket money weekly or monthly in agreement with the children, which they must distribute over the following days. The goal is to create healthy habits and responsibility for children from a young age, so that later when they reach adulthood, they will know everything about finances that they need.
Lately, you must have been googling terms such as “how to teach children to save”, “how much allowance money to give children”, or “best kids debit card”. However, the basis of everything is to start with giving pocket money and then move on to some slightly more complex things when they master it.
Explain the origin of money
First and foremost, you have to explain to children how money is earned, and that is through hard work. Money is necessary for life, and learning to handle money the right way is one of the skills they must master to have a stress and debt-free future.
How to decide how much allowance to give them
More important than the amount of money is the goal of teaching them how to distribute money rationally and correctly and not to spend it in the same second. You give the amount of money concerning their needs as well as the age of the child. The older children have the most needs, so they need a much larger allowance than younger children. The money increases according to age, but also by a commitment to helping with household chores.
Establish allowance money rules
Allowance is a form of helping a child and also a way to teach them how to handle money properly. Therefore, many parents decide to pay their children for the commitment, work, and interest they have in curricular, extracurricular, household chores, and helping within the community. Look at pocket money as a tool for teaching children about the proper handling and disposal of money.
You need to establish clear rules
If the children do not help in the household or have bad grades in school, you have to punish them in some way, and that is by reducing the pocket money for the next week or month. Children must understand that they have their role within the family that they must perform and fulfill.
Create a table of activities and obligations that the children must fulfill in the current week or month, and depending on their efforts, the pocket money will decrease or increase.
Set a rule for how often you give them pocket money
Parents establish the amount and time frame of payment of allowance money following their capabilities. When it comes to younger children, you give them a smaller amount of money usually weekly, and when it comes to slightly older children, you will have to give a slightly larger amount. It is also up to the parents to decide how often they will give allowance money; it all depends on the agreement between parents and children. Perhaps pay the teenagers money once a month because in this way they will best learn the rational distribution of money and savings.
Let the children decide which expenses they want to pay with their pocket money
This primarily applies to teenagers, and they have to choose what they want to pay out of pocket. There are various things from going out, hobbies, clothes, shoes, phone bills, or gas money if they own a car. Of course, there are things that parents will continue to pay for, but they also have to allocate some things that they will pay for out of their pocket, which has proven to be one of the better ways to learn about finances.
Encourage them to find a part-time job on their own
For many teenagers, the money their parents give them is not enough, so they look for certain part-time jobs. There are various types of jobs that teenagers can do at a discount: gardening, walking dogs, pet sitting neighbors’ pets while they are on vacation, selling lemonade, shoveling snow, babysitting, and many others. Children will feel much more useful and responsible if they have money on the side that they earn.
Conclusion
You must remember that it is not the amount of money that you give that matters, but the intention of teaching children proper, rational, and efficient use of money. When they master the skill of managing money properly, you can then start teaching them how to invest.
