Teach Children to Manage Pocket Money
Being a parent is not only responsible for your child’s daily well-being, by meeting your child’s needs and ensuring that your child lives comfortably, healthily and safely. However, he is also responsible for providing children with future education, both formal and informal in the form of life skills.
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Introducing Pocket Money to Children Appropriately
One of the important educational provisions and life skills that children need to have is managing pocket money. With adequate life-skills related to pocket money management, healthy money habits will be developed. Starting from managing expenses, how to save money, and saving habits. Children also feel the need to have education savings for future survival.
There are many cases where children constantly pester their parents to buy them certain items, without caring about their parents’ financial condition. This is where it is necessary to introduce how to manage children’s pocket money, including the principle of restraining one’s desires. Without that, it is not impossible that this destructive behavior will carry over into the child’s adulthood.
Based on a study conducted by Brigham Young University in America in 2022 on 4,000 adult respondents, it shows that children who are given the opportunity to learn about financial management or pocket money, when they grow up, tend to be more responsible and have healthier financial management.
“It is very important for parents to provide opportunities for children to learn to manage and make financial decisions from an early age. “This experience will influence a person’s attitude towards money when they grow up,” said Ashley LeBaron-Black, academic and professor at the university.
Introducing Financial Planning Through Pocket Money Management
Parents may already be aware of the importance of introducing money and financial management to their children. However, quite a few are still confused about when is the right time to introduce money management to their children and how.
A study conducted by Cambridge University stated that elementary school age children, around 7 years old, can begin to be taught about the concept of money and its management from the simplest things. Parents can start introducing this concept through pocket money management and preparing children’s education savings.
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Through pocket money management, parents can start teaching the following things:
- First , money is an important medium of exchange that has a certain value and requires hard work to get it. Someone has to work to make money. For example, parents can tell their children that they will get pocket money if they diligently go to school. Apart from that, by providing an understanding that money is earned through hard work, children can learn to appreciate money and apply savings tips.
- Second , managing money properly will help someone meet future needs better and more plannedly. For example, children want to have certain toys that are quite expensive. Parents can invite their children to start a plan to collect money by setting aside some of the pocket money they receive. In this way, children learn to manage money, become familiar with the concept of saving, and learn to delay rewards and avoid impulsive shopping.
- Third, managing pocket money according to need items will make the benefits wider. Encourage children to save money by planning how to use their pocket money according to a priority scale. For example, for transportation needs to school, snacks in the canteen and encouraging children to prepare alms posts from their pocket money. In this way, children will realize that money that is managed well will have more benefits.
- Fourth , in savings tips, the duration of giving pocket money is also important to pay attention to. Parents can provide a longer duration of giving pocket money so that children can learn to manage pocket money. For example, pocket money is given weekly, which will encourage children to have financial planning so that they have enough pocket money to use until the weekend.
By providing adequate understanding of the concept of money and life skills related to financial planning and money-making strategies, children will have a greater opportunity to continue good financial planning and habits when they grow up.