You can empower kids by providing them with an allowance. But that is only the beginning of the story.
Small Steps Towards Financially Responsible Kids
Many of us realise that simple rules aren’t enough for this must-have knowledge. Instead, it is best acquired through practical situations involving decision making about savings and expenditures. The extent of allowance can vary with the child’s age and the economic status of the family.
But the underlying fact remains the same and that is- parents need to inculcate the differentiation between ‘Wants’ and ‘Needs’ in the child. Occasional mistakes should not hamper the process and rather should be taken as an opportunity to encourage free-thinking in the child to come out of the situation. The mantra to financially responsible kids is that parents need to be patient and mature.
This drill might be painful though, the future is worthwhile. It is important to make them socially conscious by contributing towards the good causes. The’ rainy day money ‘concept has to be stressed upon to explain the importance of planning the future while living the present.
Fix an allowance and stick by it even if that seems less for the moment. Give them an opportunity to earn the differential. Don’t create a situation but allow them to explore their business acumen, this will push them to their edge and in the process develop respect for money and labour. Bribing, even the most subtle form, must be strongly discouraged as it only creates opportunists.
Efforts need to be appreciated but more by words of praise than by monetary rewards. The child needs to identify the difference between making money to just acquiring it without any possibility for bargains. Don’t just assume that the child needs everything that he asks for because many a times if asked to buy from his own money, the need might vanish. In nutshell, it is good to endow financial freedom to children but only within some boundaries, going beyond which can invite disasters for both the parents and the child.
Basics of nurturing financially responsible kids:
1. The reason for pocket money is the prime force behind deciding the age and the amount for it.
2. Be supportive during the financial training of your child while never overlooking the mistakes.
3. Teach the child to respect what he has while targeting for what he does not through the righteous ways.