Allowance adventures
How to teach kids financial discipline
When it comes to teaching kids about money, there aren't many tools or hacks to teach them. However, allowances have always been a fun, interactive way to teach children about responsibility.
It may be uncommon or even untraditional for African parents to “pay” their children to do chores. Sometimes good habits aren't always traditional. They may even be frowned upon when they push the boundaries of what we grew up with.
Yet, the world is moving ahead, and we do not want our children lagging behind, not knowing how to use their money wisely. Every parent wants to add value to their children's lives, and financial literacy is just the foundation they need for a life full of the right financial choices.
For many children, it’s unusual to receive money of their own, and without the much-needed financial guidance from parents, these children may grow up with serious financial struggles.
Allowances are one way to start building them up financially. So, if you’re doubting the benefits of giving your children pocket money, read on and let us change your mind.
Why you should
There’s a saying that some people are school-smart and others are life-smart. Well, this is exactly it. Allowances give your children essential money management skills through real-world experience, and that makes them “life smart”.
“If the allowance is tied to work around the house, it can help them learn about the relationship between work and money,” says Kathi J. Peterson, senior vice president and financial adviser at investment banking company D.A. Davidson. “It can also help the kids start to understand that money is limited. It’s hard for kids to understand that when their parents simply swipe a piece of plastic and get something — that there is hard work and sacrifice on the other end of the swipe.”
Remember that allowances should be tied to house chores or any other light tasks that teach children responsibility. Whether or not you give your child an allowance is up to you as a parent; however, in that decision, every parent needs to educate their children financially — because the majority of schools don’t.
Benefits
Allowances encourage responsibility. Letting kids manage their own money makes them quickly realise the consequences. They learn that they have to work hard and wait for their next allowance payday.
“The allowance system helps children link money to effort,” says child psychologist Dr Arnold Matinga. “It teaches them money management; it teaches them how to budget or better manage their coins until the next time they get an allowance.”
Furthermore, it fosters independence. Letting a child earn their own money makes them confident and independent. They can buy their own snacks during lunchtime at school and feel in control of their lives — even in the smallest ways. “That connection builds self-worth and a sense of independence,” Matinga adds.
Start small; don't overdo it. N$10 or N$20 a week works well with children, gradually increasing over time. This will teach them the value of saving and financial responsibility.
Fun allowance ideas
• Chore challenge chart: Kids earn points or money for each task completed successfully.
• The ‘Three Jars’ method: Split money into three jars — Save, Spend, and Give.
Yet, the world is moving ahead, and we do not want our children lagging behind, not knowing how to use their money wisely. Every parent wants to add value to their children's lives, and financial literacy is just the foundation they need for a life full of the right financial choices.
For many children, it’s unusual to receive money of their own, and without the much-needed financial guidance from parents, these children may grow up with serious financial struggles.
Allowances are one way to start building them up financially. So, if you’re doubting the benefits of giving your children pocket money, read on and let us change your mind.
Why you should
There’s a saying that some people are school-smart and others are life-smart. Well, this is exactly it. Allowances give your children essential money management skills through real-world experience, and that makes them “life smart”.
“If the allowance is tied to work around the house, it can help them learn about the relationship between work and money,” says Kathi J. Peterson, senior vice president and financial adviser at investment banking company D.A. Davidson. “It can also help the kids start to understand that money is limited. It’s hard for kids to understand that when their parents simply swipe a piece of plastic and get something — that there is hard work and sacrifice on the other end of the swipe.”
Remember that allowances should be tied to house chores or any other light tasks that teach children responsibility. Whether or not you give your child an allowance is up to you as a parent; however, in that decision, every parent needs to educate their children financially — because the majority of schools don’t.
Benefits
Allowances encourage responsibility. Letting kids manage their own money makes them quickly realise the consequences. They learn that they have to work hard and wait for their next allowance payday.
“The allowance system helps children link money to effort,” says child psychologist Dr Arnold Matinga. “It teaches them money management; it teaches them how to budget or better manage their coins until the next time they get an allowance.”
Furthermore, it fosters independence. Letting a child earn their own money makes them confident and independent. They can buy their own snacks during lunchtime at school and feel in control of their lives — even in the smallest ways. “That connection builds self-worth and a sense of independence,” Matinga adds.
Start small; don't overdo it. N$10 or N$20 a week works well with children, gradually increasing over time. This will teach them the value of saving and financial responsibility.
Fun allowance ideas
• Chore challenge chart: Kids earn points or money for each task completed successfully.
• The ‘Three Jars’ method: Split money into three jars — Save, Spend, and Give.
Comments
Namibian Sun
No comments have been left on this article