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There's a hole in my pocket

Teach your child to manage money by giving him pocket money, writes HEMJIT BHARATHAN

Managing money? Well, never think it's not for kids. For, earlier the kids are initiated into this they acquire a responsible approach towards money. They develop a money sense, which helps them later on in life. Pocket money allows a child free and responsible usage of limited money. It gives him a confidence in spending and saving his own money. In certain families children are given what they ask for and in some the parents fix the amount. Studies show that pocket money can make your child feel important as he feels that a portion of the family finances is allotted to him or her. Even a very small amount can give the child a feeling of individuality.

Says 15-year-old Sridhar, "I think pocket money is very important and makes you responsible for it teaches children the value of money as the most important thing in the world is money currently." His friend Atul differs slightly. "I feel that pocket money does make you responsible only if you keep a check on how much money you have spent and tell your parents what you are buying."

How much is too much?

But should children be given a generous amount of pocket money? Or should one monitor them strictly and buy all that they need? Should money matters and family finances be discussed with them?

The amount of pocket money depends upon the family's economic status. If your child complains that his friend gets more make him understand and come to terms that all families are not equal. Remind him that money does not grow on trees and if his friend gets more, there are other children who get a lot less. Also guide him that lots of money does not mean lot of happiness.

However, in today's materialistic world, most parents pamper children with generous allowances. If value of money is not instilled in them during formative years kids shall end up as spendthrifts.

Sometimes children's persistence and unending demands fuelled by parents' prestige to toe in line with wealthy neighbours can lead to a slow financial crisis in the family. However, in spite many parents do not reveal to kids the financial situation and protect them from such facts and realities. Instead a fake glossy picture is created. "Excess pocket money makes one not only irresponsible but can ruin and spoil children," says16-year-old Nakul in a mature voice.

Never underestimate your child or hide the truth. Studies have revealed that kids who are made aware of family finances often show a mature understanding and try to budget by cutting down costs. Instead of spending their money on ice creams and lollipops they learn the art of saving and may even come up with clever cost saving suggestions.

Says Nakul, "I spend my pocket money on buying chocolates. I save the rest for any emergency."

Atul too says, "I buy whatever is trendy at that period of time and the rest for any emergency." Sridhar who has a more frugal outlook says, "I try to save my pocket money so that I can buy something big in the latter part of my life."

But it is 14-year-old Navdeep who tops the list in thriftiness. He says, "I always save my pocket money and deposit it in my account."

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