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Allowance plan

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Why should children have an allowance plan

Why should children have an allowance plan

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Allowance plan Allowance plan Presentation Transcript

  • Children should not be given pocket money because…..
    • They do not know how to spend money
    • They will lose it
    • What if they use it to get into bad habits?
    • It will spoil them
    Which of the above do you agree with?
  • Compare this to riding a bicycle
    Do you not want to teach a child to ride a bicycle because
    He doesn’t know to ride?
    He will fall down?
    His cycle will get scratches?
    He will become independent?
  • What lessons should an allowance plan teach children?
    They do not have an endless supply of money
  • What lessons should an allowance plan teach children?
    How to make choices when faced with multiple options
  • What lessons should an allowance plan teach children?
    Working towards a long term goal has its share of challenges, pains and pleasures
  • What lessons should an allowance plan teach children?
    You have to earn your stripes
  • The basics
    Give your kids a regular allowance
  • The basics
    Agree on the rules
    What it does cover
    What it does not cover
    What kids should NOT do with the money
  • The basics
    Give kids a free hand in deciding what to do with their money
  • The basics
    Resist temptation to change the rules
  • How often?
    Weekly or monthly
  • How often?
    Make it a religious practice – allowance plans don’t work if not consistently given
  • How often?
    Older children can be given a bank account that they can operate, and you can transfer systematically to that account
  • How much?
    It should NOT be
    An arbitrary number – like Rs.100 every week
    What friends are getting
  • How much?
    Instead, it should be realistic
    Lay down the rules on what the allowance should cover – snacks, transport, gifts for friends and family, clothes and accessories
    Add up how much you would anyway spend on that (make sure you include both regular stuff and one-off stuff)
    That should be the allowance
  • How much?
    When you change the rules, change the allowance
  • How to make it work
    Encourage children to make four categories
    Spending (NOW)
    Saving (LATER)
    Investing (MUCH LATER)
    Sharing (OTHERS)
  • How to make it work
    Give them guidelines, but resist temptation to make decisions on their behalf
  • How to make it work
    Allow them to make mistakes
  • Should allowances be tied to chores?
    Not for regular chores
    Children are expected to contribute to household work not for money, but because they belong to the family
    Chores should be linked to age and what kids can do, and not to money
  • Should allowances be tied to chores?
    If they are saving up for something big, offer extra money for extra work around the house
  • Dhanashiksha Educational Ventures
    6B, K.G.Towers, Velachery Bye Pass Road, Chennai - 600042
     
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    Email: info@dhanashiksha.com | www.dhanashiksha.com
     
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