“When should I start giving my kids pocket money?” is the most common question raised in forums by HK parents. It seems like just yesterday when your kid’s main preoccupations in life was Peppa Pig. But now your little tyke has grown into a slightly larger but still little person who’s learnt how to count money and is ready to receive an allowance.
But before you buy your kid a brand new Finding Nemo purse and send him to school with his first shiny $1 coin, be wary of making these four mistakes.
1. Not giving your kid a fixed allowance
Some parents prefer to give their kids allowance on an ad hoc basis, especially when their kids are older. They replenish their funds when they run out of cash, or ask them from time to time whether they need money and proceed from there.
But giving your kids random sums of money is inconsistent, and without consistency kids do not learn how to save and budget. In fact, giving your kids allowance only when they run out of money does the opposite, since the more frugal the kid is, the less money he receives.
With a fixed allowance, a child can learn how to plan for the future. He’ll know how much to set aside each month if he wants to save up for something, and will have to learn to make his allowance last until the next time he gets money.
2. Giving too much allowance
While you certainly don’t want your kid to starve to death or look on hungrily as his peers wolf down canteen food, avoid giving too much allowance, even if you can afford it.
You want to teach your child to delay gratification in order to get the things he wants, to differentiate needs and wants and prioritise. That only comes with a certain degree of scarcity. So give your child enough to fulfil his basic needs such as buying recess and lunch food and getting home from school, but not a lot more.
If your kid wants to buy something, instead of handing over the money immediately, help him think of ways he can get them. For instance, he might be able to to set aside a portion of his allowance each month or take on a part-time job during the holidays so he can buy the new Nintendo Switch.
3. Not talking about saving
Many parents maintain the attitude that the child’s only responsibility is to go to school and get good grades, and it’s the parent’s’ job to provide him with the money that make this possible.
As a parent, it would be wise to introduce other responsibilities into your child’s life more than just saving money but a book-keeping habit.
By highlighting the importance of putting aside a portion of his allowance, no matter how small, set up a savings account for your child if he’s old enough to have his own ATM card and allow your child report to you the monthly financial status.
4. Bribing them with money to get good grades
Many Hong Kong parents bribe their kids with the latest toys and gadgets so the latter will study harder.
But that does nothing to teach your child self-motivation. Instead, you’re basically turning your offspring into the kid-sized versions of unhappy working adults chained to jobs they’re doing purely for the money.
Instead, working on cultivating a love of learning in your kids, and the desire to do the best job.