Today many parents are well educated and read well which helps them develop things like manner, and safety for the child but few know where to start from when it comes to teaching the child value of money. I have often seen parents coming up to me for their child with issues of stubbornness,throwing tantrums, back answering, etc. More or less the issues are related to the faulty pattern of gratification being followed. Parents often come to me with the question of how to manage a child who often demands for more and more?Is it okay to get a child everything he asks for? The real question to ask here is whether is it okay if the child is not given something when he is asked for?Is he okay to listen to parents ‘No’? Does he value money? In this article I have decided to answer all of these questions.

Now days kids do not value the things they are given and their demands keep on increasing. This is due to the faulty pattern of instant gratification to which now a days all parents succumb to. Hence it is suggested to the parents to not let the children obtain money or demanded goods by whining, cajoling or throwing a fit. Tutoring the child over caring for money is preparing them to be on their own. Teaching the child value for money is a life skill that affects you as well as them. It will teach a child the value for small things and inculcate things like satisfaction, patience,understanding and responsibility in a child. 

You cannot teach a child principle of financialresponsibility unless they have some money of their own to manage. Starting ofallowance shall be a good idea to make the child responsible for moneymanagement and know the importance of money. But again the question raised is,when a good time to start with allowances is. Parents don’t know when to startwith pocket money and when is the right age. They are often concerned about howmuch pocket money to give. It should be best kept in mind that the child shouldhave criteria’s for the way he can spend whatever money is given to him. Thingslike giving the child reasonable amount through particular age shall be kept inmind.

General Tips toteach the child value for money:

  1. Start early: Start as soon as they are able to count and make money or demand for goods. And speak to them about saving vs spending.
  2. Want Vs Need: Make the child wait when he demands for anything. Do not always give in to his demands by fulfilling them immediately and whenever the child asks for. Teach him the difference between a want which they have when they see their peer owe a particular thing and a need when they actually are in need of something out of which they can obtain or achieve some goal.
  3. Difference between goals: Give lesser money so it becomes easier for the parent to allocate a proportion of money to different goals.
  4. Learn from mistakes: Let the child take responsibilities for small amount. Let them learn from small mistake which is the best way to learn.
  5. Be a good role model: Children learn a lot by observing their parents saving and spending style. Hence, for your child to adopt value for money, you should preach the same in your life.   
  6. Value for E.Q: Teach them to value for feelings and emotions more than materialistic thing. Teach them, that instead of spending money to buy gifts for a friend’s birthday, they can make something that will show his feelings and emotions to the birthday child.  
  7. Help the child draw a budget: Teach the child how to deal with his daily expenses. Sit with them to list the weekly expenses.
  8. Teach them to save in cases of emergency: From falling in to having to buy a gift for an unexpected birthday.
  9. No extras before the new month: Be absolutely clear to the child about not giving any allowance in extra or in advance in any circumstances and be very firm about it.

Sometimes the tips shall also vary depending on different age:

Age 4 years to 7 years:

  • Value for Feelings and Emotions: With little one always try to teach them with rewards of love, affection and hugs rather than money or materialistic matters.
  • Earn your demands: If the child needs something,don’t immediately buy it for him. Let him save money or earn it by doing something that is equally worthy of the demand.
  • Teach Delayed gratification: teach the child to wait for his demands to be met. Let him know that right things will come at right time if needed and parents are the best judge for that.

Age 8 years to 15 years:

  • Age appropriate allowances: Set limit of money allowances according to age criterion. This will especially help when you have two or more children of different age and the allowances distributed among them vary as per the needs of the age.
  • Money shed according to each home lifestyle: Look at your own lifestyle to gauge how much money you should be allowing your child to have as his allowance.
  • Enjoy the cycle of money: Let the child know the value of money by saving his allowance, spending it on a demand. Letting him experience the euphoria of buying something on his own. In the process let him also lose some money and have the feeling and start saving for a new demand.The cycle hence continues teaching the child many positive things in the process.

Always teach them “Every penny saved is a penny earned”.