Few things in life pay off as much as the responsible handling of money. What money is and how to use it sensibly is difficult for small children to grasp. And even some teenagers struggle with budget planning when designer clothes are the trend among friends. This is how you encourage the right way to handle money and what children learn in the process.
"Don't talk about money!" That is a well-known maxim. In high society, this principle may apply. For family upbringing, however, it is poor advice. It is extremely important that you don't just hand money to children. You should seek a conversation about what you do with money and how you use it. These key points will help you with financial education for children.
Introducing children step by step
Small children must first understand that goods have their price. This realization can only be encouraged once children develop a mathematical understanding of numbers and money. Now you can give your offspring a small amount of coins and go with the child in search of a suitable item. They will experience that some things can be bought with it and others cannot. In principle, positive experiences are very important for children. You should also keep this in mind here. So, if you know that your child has their eye on a certain treat, the amount should be enough for one of these products during the first trips to the store. Later, you can teach them to save amounts for a specific purchase or to create a wish list.
Shaping pocket money as an educational task
As soon as children get older, pocket money is the most important measure in financial education. Pocket money is money that children can freely dispose of for the first time. In this respect, it is associated with financial freedoms. At the same time, we are not just dealing with gifted money here. Pocket money is linked to educational tasks. On the one hand, it gives children greater financial freedom. At the same time, they learn what saving is and that you cannot just spend money on short-term needs. You can also work towards long-term projects and fulfill a true heart's desire.
You can also support these learning steps. Pay your child their pocket money on time. This way, they can rely on consistency and plan securely. Seek an exchange about what money is sensibly spent on or where what is bought at what price. At the same time, you should be open to your children's wishes and let them dispose of their pocket money freely. Even if the child initially wants to spend all the money immediately on toys and sweets, you don't necessarily have to forbid it. The experience that nothing is left afterwards is something one must also have in life.
How much pocket money does a child need?
Different children receive different amounts of pocket money. The amount does not only depend on the parents' income. It also has something to do with other questions. What needs does a child cover with the money? What do the parents buy in the household and make freely available to children? Some children also receive additional pocket money from grandparents. This can also be included in a calculation. Does your child want to have discussions with you about the amount of pocket money? Then you shouldn't be annoyed about it. Use the chance for an exchange about how to use money and also be open to changes. In any case, you should stagger the pocket money according to age. In this respect, it will be increased over time anyway. Since many parents like to orient themselves to guidelines, here is a recommendation:
Pocket money by age:
- up to 5 years: 0.50 – 1.00 Euro weekly
- up to 6 years: 1.00 – 1.50 Euro weekly
- 7 – 8 years: 1.50 – 2.50 Euro weekly
- 9 – 10 years: 2.50 – 3.50 Euro weekly
- 11 – 12 years: 18.50 – 23.50 Euro per month
- 13 – 15 years: 23.50 – 39.00 Euro per month
- 16 – 18 years: 39.00 – 79.00 Euro per month
Strengthening personal responsibility
In general, you should seek an exchange with your offspring. This exchange is not about persuading them to make reasonable decisions. The opposite is the case. Strengthen personal responsibility through a conscious decision. That pays off in the long run. Anyone who makes conscious decisions in life for or against buying things retains financial control over their consumer behavior. Conscious consumption keeps people from falling for every advertisement. And it can strengthen teenagers when it comes to pressure in the peer group. Strengthening responsibility also includes children eventually getting their own checking account. Most banks offer this possibility from the age of 14.
Taking on a role model function
When dealing with money, parents take on an important role model function. So, feel free to talk to your child about when you do without certain things in order to save for others. They may be able to learn more from that than from parents who demonstrate how to live in luxury. Some impulse wish disappears after a day anyway. If you establish conscious consumer behavior in the family, you will often even find allies in your children. Giving up plastic waste products for the sake of the environment is a good example of this. However, two things are important in this discussion. Seek a joint conversation. These tips for good communication help. It is also important that children's basic wishes are fulfilled. This is how you show your child that you love them. In everyday life, however, this is possible through simple little things.
When the piggy bank no longer fulfills all wishes
At some point, children's hearts harbor wishes that cannot be fulfilled by the piggy bank alone. By the time they are teenagers at the latest, there is also the possibility of a first job. In doing so, children learn to work for money. They take on responsibility and recognize what their work is worth. Here, too, one learns important things for life. In addition to classic jobs like mowing the lawn, delivering newspapers, tutoring, or walking dogs, the digital age also offers some earning opportunities in connection with working on the computer. It is best to check together in the family which work is appealing. After all, the job should ideally not only bring your child money, but also be fun.
Conclusion
Children learn to handle money correctly in stages. Age-appropriate financial freedoms are just as important as the exchange about how to use money. So, you should not just give your child money, but pedagogically introduce them to handling it.
