Should you give your kids pocket money?

Boy, if I had a dollar for every time I have been asked this question…

Last weekend I was in Taupo to run the first ever Wisemoney seminar in that region.  Don’t stress if you missed it, this event was a private event organised for employees of a local business.  We had 50 people in a nice Hotel room for the afternoon and we had a heap of fun.  One of the questions I was asked by several people as we mingled afterwards was this one:

Should you give your kids pocket money?

Firstly, the short answer:  Yes.  More on this at the end of this article.

The challenge you have as parent is how to administer this pocket money so that it doesn’t become a noose around your neck.  What do I mean by that?  Well, if you create an attitude of entitlement with your kids you can create a  noose for yourself.  That means they expect to see pocket money as something they deserve, rather than a gift from Mum or Dad.  What are some key things you need to remember as parents to make sure this doesn’t happen?

And how much pocket money should you be giving your kids?  Does the old rule of “one dollar per year” still apply?  That’s a tough one, especially if you have kids who like to spend their money on iTunes or Microsoft LIVE!  And what if you have eleven children – how do you manage that in your budget?!!

Questions like these are what led me to write my new book – Kids and Money, how to raise a financially savvy next generation.  In that book I’ve answered these questions and a bunch more.  AND, I’ve asked a good friend of mine who teaches parents and children about money to help out by answering the questions as well.  So you get two experts for the price of one!  But this book is not out until September so you have a wee way to wait before you can get your hands (and eyes) on the great info we share.

In the meantime, here are two resources to help you to help your kids.

MOONJARS

What is a Moonjar?  The easiest way to explain this is by video – here’s a link to a video on our website to help explain how powerful a Moonjar can be to create healthy financial habits in your children.  Access video here

And here’s an article a friend of mine wrote for me to help parents to teach their children the value of money, its a great article for those of you seeking to instill wisdom into your kids, grandkids, nieces or nephews….  There are two options to help you:

– Firstly you can open the page to read and possible print.  PDF version

– Or you can read it on our Wisemoney Article archive.  Web version

DIGITAL SEMINARS

This  year I’ve started hosting Digital seminars to provide you an opportunity to upskill in the area of money without leaving the comfort of your own home.  You can get wise beside the fire with a cup of tea.

In a few days I’ll be hosting a webinar on the subject Kids and Money.  In this 30 minute digital seminar I’m going to answer the most basic of questions people ask me about kids and money.  I’m going to talk openly about how we have purposely invested into our kids and their dreams.  And I’m going to give you the basic tools you need to protect yourself from you!  Don’t manufacture a nightmare by creating the wrong attitudes towards money.  Its not difficult, you simply have to talk the right way and answer questions the right way.

This seminar will be on Monday 24th June at 8:00pm NZT.  Based on feedback I received last month I have moved these digital seminars to a web-based solution, so there’s no need to use a phone to dial in.  You will be sent a link to join a web-based meeting and I’ll be talking to you through your laptop, computer or tablet.

You can register for the next digital seminar here.  Kids and Money Digital Seminar

Now, back to the issue of giving pocket money to kids.  Money is a fantastic tool to use to teach kids all  kinds of lessons.  If you use cash – which you should do – its tactile, practical and a finite resource which allows for all sorts of lessons.  You can help them to save, help them to share with others, and teach them the most important lesson of all – money does not grow on trees.

And when they learn this lesson with their money they truly get it! 🙂