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.