Friday, 25 March 2011

Cash for kids

When do children begin to get the first idea of the value of money?

My parents may well argue that they are still to find the answer to this question.

My boy hasn’t demonstrated a clear understanding in this area yet. When I let him go to the school disco alone recently, he recited an interesting take on how the money system works in his mind.

“Yeah dad, I know. I give them money, they give me what I ask for and some money back.”

Yes, that is how the tuck shop will operate, but he thought this was an everlasting cycle, and not that his money would eventually diminish to nothing.


Mind, I was very proud of him as, pleading poverty, he had got one of his friend’s parents to buy him a drink, and he still had 50p in his pocket.

The force is strong in this one.

But I’ve been thinking of how I may gently evolve his Finance 101.

The first thing I did was to take all his liquid cash, in his various piggy banks, count it up, then asked him to spend it all.

Obviously he enjoyed that process, but for me it was all about showing him that he had exhausted his funds, hopefully increasing his understanding, and maybe making him think more about his purchases in the future.

There was some pain in that, and I have perhaps over used the line “well if you had any money,” since.

I think I now need to introduce pocket money, and the possibility for him to ‘earn’ a little more if he wants to.

Despite my perceived benefits of this, I am also mindful of over monetizing life, and producing a child that won’t act to order unless he has negotiated remuneration.

I have a memory of my own folks introducing pocket money, in lieu of the simple yes/no system they were operating previously. We were also able to earn extra cash for doing certain things like mowing the lawn.

We were actually paid by the hour, which was another good lesson I learnt.

Never pay anyone by the hour.

I don’t plan on getting all stern on this, strictly adhering to him having to pay for everything he wants, I’ll let him continue to freely benefit from the food and water that I provide, but hopefully he’ll start to get the drift.