Children and Money
It can be quite a debate on the best way to bring up children in terms of money. There are so many questions. Listed below are some of them:
- Do you give them pocket money or not? If so, how much?
- Do you link pocket money to tasks around the house? If so, does each task have a value or to you value the tasks as a whole?
- What expenses do you as the parents pay for and what expense do the children pay out of there pocket money?
- How much information about the household financial situation do you share with the children?
- What do you do if the money gets tight in the house (i.e. a parent loses their job)? How does this affect the pocket money? How much of the household crisis do you share with your child?
- What and how do you teach your children about saving, spending & giving?
- When and what do you do to teach children about bank accounts, cash, plastic and other banking matters?
These questions and more will go through many a parents head and in many cases there is more than one appropriate answer to each of these questions.
In this article I am not going to discuss what I see as the ideal, but more what I do with my children. Over the years it has changed. At all times my intent has been to help my children to better understand the financial world they operate in.
In terms of pocket money we do pay pocket money to the children. This is a monthly amount that is transferred directly from our account to their transaction accounts. This is not directly linked to the tasks that they help out around the house, however I do have an expectation that they will participate in the tasks around the house (but we will leave that for another day).
With their pocket money they can spend the money as they see fit with a few parameters. Firstly I have an expectation that they place a percentage in a Savings account for the future. My only other parameter that I have is that their spending is in line with the morals and ethics of the family.
As to understanding the world that they are growing up in, we have ensured that each of the children have bank accounts and can access their accounts using debt cards and via the internet. Through this process they have each opted for a savings account. In the savings account they have placed funds that they plan to use in the future for a specific purpose. They each have different goals for their savings. Though at the start I was nervous around both debt cards and internet banking, there are some protections that you can put in place and they had to start using these at some point. Mind you I did have some serious conversations with them about security and protection as part of this process.
Though for oversight reasons I have internet access to all the children’s accounts, for the most part they operate their own accounts. We place their pocket money in each month. The children each decide how much and then move their money from the transaction account to their savings accounts. When they want to purchase something they do so with their debt card.
I know, I know, some of you are going to tell me that they are going to make a mistake, purchase something silly, lose a pin number, etc, etc, etc……. Yes you are right. We have already had one forget their pin number and another forget their internet password. This is part of the growing process. All I did was to take them down the bank and then they went up to the teller and advise what had happened. The teller helped them and sorted out the pin or password…… After all they are not dealing with large sums of money and I would rather see them make the mistakes now with limited funds than when they have large amounts.
Created by: Attila Ovari
© Attila & Kim Ovari 2012. The content of this Article may be reproduced with permission of the author. Created 02 Jun 12