8 Advantages and Disadvantages of Giving Pocket Money to Teenagers
10 mins read
Common Issues for Teen
As children step into the phase of teenager, their monetary needs increase. They ask for money for the canteen, to buy a birthday gift for a friend, for a movie, etc. And the list goes on. What do you do then? Do you keep on giving them money until all their needs are met? Well, the answer is a ‘no’. Let us look at how you can handle your teen's increasing monetary needs.
When children have not reached their teenage years, parents have control over the things they would require or need. But when your child enters his teenage phase, things will take a different path. Your teen’s requirements and needs will increase as he will grow. This is when you should start thinking about giving pocket money or allowance to your teen.
It is said that like all other things, a child develops the attitude towards spending money from home. He observes and learns from the way you handle money; i.e. earn, spend, borrow, donate, etc. Hence, it is very important on your part to teach your child to respect money and spend wisely. A teenager should realise and understand the amount of hard work that goes on to earn money.
Things to Keep in Mind while Giving Pocket Money
'Should children get pocket money?' - is a question that comes to the minds of all parents when their children are in teenage years. You will notice that as your child grows he will ask you for pocket money and you won't be able to deny him. But, when you give him a certain sum of money, there are many things that should be explained to him regarding money management:
Make your teen understand what pocket money is really for.
Let your teen know that once the pocket money is over, you would not be giving any more money.
Pay the pocket money on a set day. Maybe on the 1st or 15th of the month.
Pay how much you can afford. Your teen might compare you with other parents but don't get affected by that.
You have the right to know where your child is going to spend the pocket money, so don't feel bad when asking him the details.
Giving pocket money will help your child prioritize on what he really wants. However, you should extend your support in helping your teen to budget. Chalk out a rough estimate of how much to spend on travelling, food, gifts and entertainment. But also be aware of what kind of entertainment your child indulges in. You would not want your teen to be spending money on any wrong sort of entertainment.
3 Advantages of Giving Pocket Money to Teenagers
Like any responsible parent, you will have qualms when starting pocket money for your child. 'To give or not to give?'; 'How much to give?' - all these questions will hover your mind. But, why think negative? Giving pocket money to a child can do good to him. Here are the advantages of giving pocket money to children:
Makes the teen cautious:
Giving pocket money to your teen would make them cautious and thoughtful of their usage of the money. They would think twice before spending.
If your teen wants to buy an upcoming electronic gadget or a really expensive dress for which you refuse to spend on, he will save up money till he has enough to satisfy the want. Pocket money builds and improves the skill of saving.
Improves the skill of managing money:
When a child receives a particular amount, you would have to teach your child to make choices. The teen would eventually learn to take a decision on what he/she really wants to spend and how much to spend.
5 Disadvantages of Giving Pocket Money to Teenagers
All mom and dads keep aside some pocket money for teenagers with the object of making them responsible and instilling saving habits in them. But if parents shower excess love and become lenient with their children, it is when the children start being reckless with the money given to them. Although pocket money makes a child understand the value of money, in most cases it goes the wrong way, particularly in teenagers. Following are the cons of giving pocket money to your children:
Picks up unhealthy habits:
Picking up unhealthy habits is common in teenagers. ‘Teenage’ is such a tender age where children are attracted to all things wrong. It is the age when they don’t like being put under set of restrictions and they pick up habits of drinking and smoking from their friends.Moreover, in order to create an impression among friends, they spend more money without realising what they are doing. And they may have trouble in future in handling their finances.
Become callous in spending:
If you give your child too much pocket money, then he will not be careful while spending. When children are given a huge sum and not asked where it was spent, they don’t value it. They buy things that they won’t use after 2 or 3 days. This is one of the reasons why giving too much money is discouraged. As a responsible parent, you should make a note where your child spends.
It is often observed in teenagers. If a teenager gets more pocket money from his parents, he gets superiority complex. A child at this age think of himself as being superior to his friends and treats them as a subordinate if they get less pocket money or none at all. If this continues, he will have the same attitude when he grows old which will pose a problem for him once he enters into the corporate world.
Neglects his own people:
As a parent, you give pocket money to your child with intentions of making him wise and responsible with money. But, giving money to children from a young age can have a negative effect on their demeanour. If a child is given too much pocket money, he may feel that he can manage his own expenses and may cut his contact with you. He may come to you only when he needs money or something else that is beyond his capabilities.
Loss of moral values:
Although this is not the case with all the children, it still happens. Sometimes, children who receive too much pocket money or get into the habit of spending too much may think everything can be bought with money. They may start believing that as long as they have money, they don’t need anything or anyone. Hence, their behaviour towards people who don’t earn much or have less amount of money changes to bad. He loses all the manners and moral values taught to him and often takes his parents for granted.
5 Tips to Teach Money Management to Teens
Teenage is the right time to talk about the matters of money, budget, expenses, and savings with children. Because if not in teenage, then when? At this age, children are wise enough, even your opinions won’t match, but your child will get a clear picture of what you are trying to make him understand. Here are few tips for you to teach children about money management:
Discuss your income and expenses
Make your child sit with you and discuss your income, expenses, and monthly budget with him. Showing a greener world that doesn’t exist won’t do any good; show him the reality. Tell him about how you divide your income over the month and how you prioritize your needs. Explain him the difference between ‘wants’ and ‘needs’ and from the next time he will be reasonable before spending money recklessly.
Delegate financial responsibility to your child
When a child attains teenage, consider giving him some financial responsibility. By financial responsibility, we mean managing small day-to-day expenses, like handling money to buy milk for a month or cell phone bill. Managing small expenses from an early age will prepare him for the future and he will think twice and calculate his money before spending over something he may never use.
Instil saving habits in him
If you give Rs. 400 to your child every month, ask him that he should save at least Rs. 50 every month. In the beginning, he will question you…“ why give money to spend if you want me to save it?” He won’t understand it then, but every little penny saved over the months will instil saving habits in him and after a year he will have savings for something better. If your child wants to buy his favourite toy car or a concert ticket, make a savings plan. Show him to make a chart of how much he will have to save every month to get what he wants.
Teach him smart shopping
Next time you go for your monthly grocery shopping, take your child along with you. Things learned practically are always remembered. Show him how to do a cost comparison. Take a product and if it is expensive, ask him to find its substitute that is in your budget. As your child grows older, you can also tell him to do research about products and read customer reviews before buying something expensive.
Analyse monthly statements
Doing a review of monthly expenses of your child will help you understand where he is spending much and is it really necessary? If he is spending way too much on movies or eating junk food from outside...ask him to cut it down. A review of his expenses can show you where he is spending unnecessarily and you can always ask him to cut it down.
WATCH: How to Teach Money Management to Children
Follow this advice to instil saving habits in children:
As soon as your child says ‘I want this’ or ‘I want money’, this should be your clue to explain him about money.
Watch your child’s behaviour and his spending habits. Ask him what he wants to buy and how he will manage money for the same.
Ask your child to make a wish list for the year and how they buy it. This will help him in prioritising his needs and wants. He will even understand that needs come first before wants.
If you want your child to handle money effectively just like adults, give him responsibilities. Tell him that he will have to earn money and learn to manage as well.
To make your child financially stable as adults, instil saving habits in him from an early age. Saving money in a piggy bank, an envelope, or in a savings account - a child should realise that a little amount of money needs to be saved.
Finally, allow him to make decisions related to his expenses. He will make mistakes – he will probably lose it, spend it on wrong things...but these mistakes will make him wiser.
So, if you and other parents are having a conversation on “should children be given pocket money?” It is important for you to understand the implications of giving pocket money to your teen. No matter how efficient your teen becomes in managing money, it is still essential on your part to keep a track of your child's pocket money and intervene when necessary.
Do you give pocket money to your child? Does he spend it wisely? And what ways do you adapt to teach him money management? Share with other moms in the comments!