Pocket money is a good way for children to start to learn how to look after money so it is an important milestone in a child’s development to get pocket money. The problem is when exactly you start giving it to them.
When does a Child understand what Money is?
We all know the exasperation of dealing with a child that really wants us to buy something for them. When kids want something, they can be relentless. This goes for kids of all ages so you may be tempted to think that kids only understand what money is when they leave home. The fact is though that children can understand simple concepts about money from the age of about five years and older. It is at this age that you can start teaching them about saving and so pocket money can start about then. At this young age though, children should be encouraged to save all their money and pocket money should really be no more than a token amount.
Make Saving into a Fun Game
Piggy banks have been used for years as a fun way to introduce kids to saving. You do need to realise though that this also has a downside – kids are very clever and will soon figure out that your wallet is a great source of food for the piggy. It is a good idea to let kids earn the money rather than just giving it to them. You should also look into opening a savings account when the child has enough money and take them with you every time you deposit money.
Patience is a Virtue
A child of any age is likely to fall victim to the need for instant gratification. The first stop will likely be to buy sweets, toys or gifts for people. You need to allow the child to make their own mistakes. Give them the allowance but make it crystal clear that you will no longer be buying them sweets. When their pocket money runs out you need to stay firm and not give in when they ask for more money. This way they will learn that there is not an endless supply of money available to them and will value it more. If you want your kids to have the best possible future, giving them a good grounding when it comes to money matters is one of the best ways to go about it.