Do you give your children pocket money?
These days the lesson we teach our children about money are more than likely quite different to what we experienced ourselves when we were growing up. Our children watch us constantly use EFTPOS machines to make payments when we shop. Rarely do we deal in cash.
Mistakenly, children can believe that with the press of a few buttons, there is a bottomless pit of money waiting behind that screen for us to access. Rarely do they understand the mechanics of bank accounts and so forth.
We can start early with our children and help them become financially fit adults. One of the best ways to introduce our children to money is via school banking. This can teach them to save regularly. The school banking programs offers rewards based not on the amounts deposited but on the number of deposits, thus rewarding the regular saver. Consider starting this with your children.
Now the question remains, how do children get money for school banking? Pocket money can be a contentious issue amongst mums especially who may feel the need to compete with other parents and their children’s seemingly endless appetite for acquisition. There are a few tricks to handing out pocket money. Try these out and see how you go:
- Set an amount you are happy to pay out every week.
- Choose a pay date ie every Friday and stick to it.
- Ensure that children earn their pocket money. This can be by completing household chores such as making their bed and doing the dishes or helping with washing etc. You can also deduct from it when chores are not done.
- Force them to save at least 50% of their money – the school banking creates this habit.
- Help them to set a savings goal for their bank account.
- Show them how to save for things that they want and do not buy them things they want all the time.
You can start pocket money from a very early age but the really lessons tend to come once they understand counting and can read so around 5 or 6 years of age. The sooner you start showing your children how money and the world works, the better their chances of growing up being confident in how to handle money.