How Pocket Money Benefits Children
And why it is not about educating them on money
It is always a debate between parents about giving their kids pocket money.
Those who agree think it is a good opportunity to teach the value of money. But those who are against thinking children would be misled. They are worried their kids would treat money as the ultimate reward for everything.
Obviously, there are valid arguments from both sides. I personally might not agree to reward children with money for good grades or doing chores. But I’m still leaning toward the idea of giving them pocket money. Because the benefits are far greater than just teaching them about money.
Pocket money can be an excellent tool to teach kids about resilience, responsibilities, and patience.
Let me explain why.
Learn from making mistakes
A few weeks ago, I was talking with a couple of friends about pocket money for their kids.
One father told me, “My daughter is absent-minded. She would bring the money to school and lose it for no reason.”
Then another mother told me a similar answer about his son, “He has no sense of money. He would spend all of his pocket money in one day.”
In both cases, I don’t think the two parents are worried about losing the money. I think they are worried about their kids making mistakes. Thus making their children feel guilty or embarrassed.
In my view, it is one thing to teach children about success. It is a totally different thing to not let them make any mistakes. In fact, we adults make mistakes all the time. We learn the lesson and move on.
For instance, when cooking in the kitchen, many of us have had minor injuries. Like burns from boiling water. Would that ever stop us from cooking again?
So, why can’t we let our kids learn from their mistakes too?
Protecting our children from any mistakes or failures can only carry them so far. But sometimes letting them fail. And then helping them to learn — and to recover — from the failure will carry them much further.
Because that’s what makes a person resilient.
Learn about managing resources
Today, children in middle-class families live in an abundance of everything. Especially those in Asian cities.
I’ve heard parents complaining about their sons buying all the latest gadgets.
Or teenage daughters often treat their friends to fine-dining restaurants.
But from the kids’ point of view, these sorts of behaviors are totally understandable. Because the money is always coming out of the parents’ pockets, not the kids’, the children won’t feel the difference financially between a $20 and a $200 meal.
That’s why giving kids pocket money is so important.
It helps them to understand money — or any resources, in general — is not unlimited. They need to learn it is their responsibility for the resources given to them.
Here is an example.
Some parents often complain about children not finishing their food during dinner. And then eating junk food as a late-night snack before going to bed.
In my view, this is another cause-and-effect situation. If a kid knows he can ask for food anytime he wants, why would he care about the food at dinner?
But think about if you restrict his food access after dinner. Would he treat his dinner differently?
The same thing goes for the idea of pocket money. It helps our children to treasure what they have. And to understand they can’t expect there is always more coming their way.
Because life is not always a buffet. So don’t take anything for granted.
Learn about delaying gratification
Another problem of living in abundance is, children are spoiled with instant gratification. And worse, there is no trade-off necessary for their different wants.
Because everything is just one “ask” away from their parents.
Remember those toys your kids asked to buy during the last out-of-town or overseas trip? Have you noticed those toys often lose the love of your kids once they get back home?
That’s exactly what instant gratification does.
Even though the famous Marshmallow Test has shown the benefits of delayed gratification. In real life, parents are often tempted to do exactly the opposite for many reasons.
But let’s imagine for a second. If your children are buying their toys with pocket money, what would happen then?
Well, the first thing they would do is, to see if they have enough money at the moment. If not, they would have to wait for another week or month for extra allowance. And the wait is good. Because it gives them time to really think about how badly they want that toy.
A second thing that might happen is, they find another toy they want during this waiting time.
And that’s even better.
They would think hard about which one of the two choices they are going to get.
Thus, pocket money can be a very effective tool for teaching our children about patience. With delayed gratification and trade-off as bonuses.
To sum up
Having said all that, I am by no means criticizing how parents raise their children nowadays. There is no doubt in my mind all parents want the best for their children.
What I am trying to say is, pocket money seems like, it is just another old-fashioned way for money management.
But if we can use it properly with our children, pocket money can teach them so much more than just money.
