Managing your finances is such an important life skill, however, no school teaches children how to do that. Pocket money or allowance can be a great way to teach children money management skills. By managing their pocket money your child can learn how to make decisions, deal with limited resources, and understand the benefits of saving and donating....
My husband and I have discussed many a times about this matter of giving pocket money to our children. We have always decided against it. Perhaps one of the reasons, we tell ourselves, is that we anyhow get them everything they ask for, albeit, after a range of discussions moving from simple to intense, around the pros and cons of their asks. But I agree, like the article says, that pocket money could become an opportunity to build awareness around financial management in our children.
Also, we have often thought about what amount is the right amount for pocket money. I like this formula mentioned in the article for deciding the amount ? something I will consider if I ever decide to start the concept of pocket money with my children.
Personally I?m also against binding money to house chores. I?m of the opinion that children need to engage in doing chores in their environment, regardless of any incentives. This way they learn the importance of these chores as a way of life rather than something they do to get paid.
Activities around the house such as helping with washing dishes, making their beds, drying clothes, taking out the trash, helping with cooking ought to be a natural part of their daily lives. I believe, children should understand this crucial point before introducing a financial element. This will bring about a balanced outlook towards work and incentives.
Also, there is the aspect of intrinsic and extrinsic motivation to consider. One stream of thought believes that any external rewards will kill the intrinsic motivation that children naturally have, hence introducing money as a reward for chores and other activities must be done in a careful manner.
This article has certainly, yet again, started the debate within me of whether to give pocket money to my children or not.
The article shared pretty useful tips for someone considering to start pocket money of their kids. I also felt that there could have been more elaboration about how to get kids motivated to engage in the system of pocket money and what all it entails. Another aspect which could have been addressed in more detail is the cultural sensitivity ? it is not a very familiar concept to Indian households and hence could require shedding some light on the aspect of getting familiar with this concept which would firstly require generating an interest on the part of children.