Pocket Money, Should Parents develop this habit at the tender age?
"We teach our children to save. As an attempt to prevent useless and thoughtless expenditure, it has value. But, it is not positive, it does not lead the child into the useful avenues of self expenditure and self expression. To teach children to invest and use is far better than to teach them to save"- Henry Ford
To give or not to give, to trust, or not to trust- this is one of the biggest parenting debates of the modern age. The practice of giving pocket money to children was started with the idea of teaching children how to manage their own money. It did not take long to become part and parcel of a child's life. By giving child money of his/her own, it was hoped that they would learn to save and manage money, which would be a big asset, when they grew bigger. However, every coin has two sides. A child is tempted by a lot of things. The risk of useless expenditure comes with giving children money. And, as the hole left in the savings is not compensated for, it puts strain on the earnings of the family.
Giving pocket money has a lot of advantages. Learning to manage money is an essential life skill. By giving a child pocket money, it also gives them financial independence. He/she is now able to buy necessary things, such as notebooks, materials for projects and also to spend, occasionally on other things (ice creams, chocolates). The parents can also regulate the amount of money they give to the child, and also give incentives based on behavior etc... Thus the child not only learns to spend money judiciously, but it also improves their character and performance. This practice is not novel, but has been used since time immemorial. Kings, in ancient times, used to give their sons parts of the kingdoms, to rule on their own. Whoever did best at managing affairs would become the next king. Hence the administrative efficiency of the kingdom would increase. Also, the child learns the basics of economics such as inflation, savings, investment etc.... making them more knowledgeable and apt at handling financial crises.
However there is a flip side to all of this. As the years go by, life becomes faster. Nowadays parents spend more time at offices, working off like robots. Which means that they have lesser time to look after the children. While giving pocket money saves valuable time of the parents, it also means that they have lesser time to check on their kids. A lot of this independence is being misused. Now, children are becoming more spendthrift. They spend money on all kinds of useless things and burn a hole in the parents' pockets. In the UK alone the amount of pocket money given has increased by 462 percent which is nearly twice as much as the increase in parents' wages. This really imbalances the financial situation of the house. The film ABCD also describes this. The main character John, an Indian-American is a spendthrift, belonging to an affluent family. His father, who tires of his behavior, sends him back to his native place in Kerala, where he is forced to survive on a measly sum of money. However, on returning back, there is still no change in him. In such a situation, giving pocket money feels like a waste to many.
However, this problem is not without solutions. Primary schools in many countries have started Money Management clubs, which teaches children how to use money smartly. In the modern age most of the money is being stored in accounts. There are apps that help parents monitor how their children use money. This helps to regulate useless spending and also put a cap on the amount of money. Pocket money is more of a boon than a bane. It helps children to become independent and manage money smartly. With the right steps we can turn this generation into smart and responsible citizens of tomorrow.
Hiral D. Myatra
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