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

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  1. Great topic and something that is always talked about in my home!

  2. I love your approach to this subject of kids and finances. I believe its one that is both practical and rewarding. Rewarding for both children and parents. Many a child without adequate prior financial exposure is inundated with the realities of the workings the financial world when eventually they need to face it.
    Also of great importance is your personal involvement to a reasonable extent in their budding financial lives. This conotes responsibility on your part in steering your kids right. Infact your personal involvement is a deep sign of love… Hopefully, they’d see that.
    Once again, awesome stuff!

  3. Thank you for sharing. Basicaly this concept is very interesting. I Ilke it. But in my country, maybe this idea will be need more efferot, spcially using bank account. But, i think its still work by manually. My daughter still 4.5 months, may when may doughter became a gilrs, i can try it.

  4. This is such a great post. I have four daughters and with my husband we are always discussing how best to teach them the handling of money. You offer great ideas. I was looking into a Paypal student card for them. Great information.Thank you!

  5. This is an awesome way teaching by experience. I like the freedom aspect that you inculcate into your process. I am going to include some of these in our strategies. Thanks

  6. So true this article! There is such a fine line between what and how much to give the children and what I allow myself to buy for them without being considered ” çheap”. .

  7. Thanks for letting us hear your views on money and kids – ( and thanks for the follow.) Our teenagers have debit cards which are linked to the accounts that I transfer money into every fortnight – this is to be used as a clothing allowance. They don’t have regular pocket money anymore, since we have a very large family now, but did so when the family was smaller. One thing I didn’t like about pocket money was that the children could have gotten into the habit of buying silly little trifles and never learned to be responsible with money, but your idea of making them save some may remedy that :)
    By the way, do you have relatives in Tasmania???

    • Thank you for your comments. As the children get older we will need to re-look at the whole pocket money thing and transition the children to earning their own money. I do have family in Tasmania. My uncles family lives in Tasmania.

  8. Thanks for following me! Great blog. Will be keeping tabs in future!

  9. Thanks for sharing! I am a fan of Debt Proof Your Kids by Mary Hunt.

  10. I think what you’re doing sounds very reasonable. I wish my parents had taught me more about finances and the ins and outs of banking when I was a kid. I suddenly found myself on my own at sixteen, and it was quite a task getting a grasp on my own finances when I had never before had a bank account or anything like that. Luckily, I’m pretty level headed and learned fast without too many horrible mistakes, but I was in a pretty risky situation financially. It would have been nice to have a bit more knowledge of what I was getting into.

  11. This is the most interesting thing really. Not so much that you have a great strategy to teach your children the value of money and how to work with it (which you do) , but that it reflects our increasingly electronic world. I am still fighting everything going electronic with banking online access etc. but your kids are right with the times. In my day when my father would pay me .25 to memorize a poem (which sounds crazy but I do love poetry…not that I was a hard sell or anything…guess I would have done something else in the offing for the quarter)…but then pocket was the predicate descriptor of ‘pocket money.’ :) Great also to read a man writing with such love and practicality about family life!! I enjoyed that very much.

    Thanks you for finding my blog and I do hope that you enjoy glimpses into my neck of the woods from time to time!!

    • Thank you for the comment…. It is interesting that as things change , how do we keep up (ie Internet Banking). That said there are pros and cons with every transition and the hard part is to ensure that seize the opportunities of the pros, while risk managing the Cons

  12. Nice article about money and children! I give my 9 year old money so she CAN make stupid mistakes and buy silly things. Better now than when she’s 29! Glad to hear other parents see things the same way we do.

  13. Very good post. I too have 4 children who are now grown up. By teaching them about money (both having it and not) and the value of money & work, they have successfully worked out their economies as young adults. Each of them has done something “stupid” such as the first huge phone-bill and that was a very effective learning-process. The world around us today shows a strange idea of money and wealth and the idea of living from loaning. I have been very careful to steer them clear of this as I believe it is the biggest trap to any kind of economical situation for an individual.

  14. Hey, thanks for the Follow at acrobaticthoughts. We’ve changed how we deal with money and dc over the years, and its always interesting to discover how others are doing it. I totally agree that its better for them to be learning some of these things (including the ooops!) when the repercussions are smaller & less catastrophic.

  15. good thoughts. i’ve been earning my own money for nearly 50 years, since i was 12. i know times are different now and life was a bit simpler when i was growing up. so many demands on kids today for their time and talents. good, sound advice. thanks for sharing.

  16. nice, interesting post. i have a 3 year old and another on the way, so I still have a few years before needing to think about this. I’ll keep it in mind though. :) thanks.

  17. Thanks for following me at sheslosingit.net. I really enjoyed this article because in addition to being a fitness blogger, I’m a bit of a Tiger Mom and my kids are getting to the age where we are trying to figure out allowance money and spending. Thanks for giving some good ideas! – Lisa

    http://sheslosingit.net/

  1. Pingback: Children, Money and Shopping « Attila Ovari

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