Saturday, August 22, 2009

Teaching Kids Money Management


I suggest parents not to link everything to money. I have seen parents say, “We cannot buy this because it needs a lot of money” when kids asks for something or even saying “This was so expensive” when kids break something. In this way, kids start thinking that everything comes with money and they start putting money first and then start developing complex regarding 'rich and poor'.

Instead we should relate things to 'our needs', 'emotions', ‘family values’, ‘family rules’, ‘our requirements’, ‘future plans’, etc.

My son was really fascinated by a convertible car he saw everyday to school in the parking lot. He too wanted a car with no roof on top. :0 I tried distracting him, though it helped sometimes but not always. After much hassle, we told him that different people have different likings and they buy things accordingly. This is what daddy and mummy thought was best for you and so we bought it.

So, we got an attractive piggy bank for him and I make him put a 10 rupee note everyday in it before he leaves for school. And I told him “The reason we put the money in the piggy bank is that we want to save enough money to buy the car you like.” I remind him of this every day. And at the end of the month, we open the piggy bank with a key and we count the money. And like to see how his face brightens up with a smile every time he sees his collection.

By doing this I just wanted him to know that things are got after months of saving!

I have decided how to teach money management to my son Umar in the future (when he is around 8):
*I will give Umar regular consistent allowance...and let him decide and purchase what he can afford (like games, toys etc) with his allowance.

*I will also suggest him that some of his allowances should be kept aside for savings for his future big purchases (preferably a Piggy bank).

*Gifts from relatives in the form of cash will also be made as allowances.


I believe that if children do not have their own money, they cannot learn how to handle it.

About the amount of allowance to be given to kids..It fully depends on the age and on their parents.

My Mom used to gift me some toys/games whenever I used to do a good job and allowances were given occasionally on some festivals.

Hope this works.

14 comments:

  1. very very informative blog !!!

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  2. Thanks, for visiting my blog and posting your comment.You have a nice family blog.

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  3. @ Shabnam: Thank you very much.

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  4. I enjoyed this post, very informative. I really liked the part where your son was able to appreciate this month's savings.

    Eventhough my kids are grown, I still have to show my daughter how to handle her finances. It is so crucial. Many marriages are destroyed over money matters. My son has learned how to manage his money since he was a little child and is still doing very well.

    I like your template - clean and fresh!

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  5. Hey nice and informative site you got there pal.

    Sincerley,
    Adeel Imran
    http://gobblerr.blogspot.com

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  6. These are great ideas. My son's a little young right now, but I'm keeping these ideas so I can use them when he is old enough. Thank you so much!

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  7. Never too young to teach them about money management. Great post.

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  8. @ Nativa: Thanks a lot for visiting my blog and appreciating my work. Hope to see you more often.

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  9. @ Adeel Imran: Thanks a lot bro for visiting your blog.

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  10. @ Mama Coyote: Oh! Your son is too young for money management now and too cute... Just visited your blog and saw his video.. Thanks for visiting...

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  11. you have a nice blog about kids and layout also.thanks for your comment in my blog.i follow your blog follow my blog also my-a-it.blogspot.com

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