“Money can make the world go round” seems true on many occasions. More and more people are in debt at some point in their lives. It is therefore, pertinent to introduce the concept of money, its usage and saving, to children at a young age, five being a good age to begin. Pocket Money is the first step towards this aim.
Pocket money is a small weekly sum of money given to children by their parents. This does not have to be earned. It is money for small personal expenses. The sum may vary depending on the income of the family. Each parent can afford an amount which should be discussed with the children and fixed. It should also be decided what the child intends to do with it- buy a box of sweets or WWF-stickers. Then parents should not have to spend money on those items for the child. The pocket money may be withheld as punishment. This may be compensated for good behavior. There are some chores that need to be done at home as a duty and others for which you might be paid. This can be chalked out with parents in the beginning. Again, an increase in pocket money may be given from each Birthday. Having a limit on pocket money is necessary. Only then will the concepts of budget, saving and thinking before expenditure be learnt.
My five-year-old asked me why we are so careful with money when there are so many ATM’s to choose from?! Increasing use of credit cards, ATMs and internet banking makes money and their expenditure invisible to the child. Hence, the pocket money concept is very essential and useful to the growing child.