Career

7 tips for teaching your child how to handle money

Learned young is old, they say, and money is no different. Anyone who learns to manage money well at a young age will make better financial decisions later on. Giving your child pocket money and learning to save is therefore essential. But how do you best approach this?

For example, when do you start with pocket money? And how do you ensure that your child actually wants to save?

Start early

The first question that might come to mind is when it is best to start giving your child pocket money and learning to save. There is no unequivocal answer to this: it differs per child at what age the lessons begin to penetrate. You probably know this best yourself. But remember: learned young is done old. Nibud recommends starting around the age of 6.

Start with cash

Do you always know exactly how much is on your account? Many people are more aware of exactly how much money is in their wallet. This is exactly the same with children. They often get to know the value of money more easily through cash, because it allows them to see for themselves how much they have saved.

Come up with a goal

Think of a savings goal together with your child, something he or she really wants to have. Make sure that this savings goal is not too big, otherwise your child may lose motivation. When you have a goal in mind, it is easier to learn the value of money. Only in this way does your child learn that if you buy candy from your pocket money, for example, it takes longer to reach the goal.

Create a savings meter

With a savings meter you can keep track of how you are saving and how close your child is to his or her goal. With a savings meter you color a box each time or stick a sticker when you have received pocket money. This way you can also make saving a fun activity.

You can get started to make a savings meter yourself, but you can also find a lot on the internet. Not only on Pinterest, for example, but also many banks such as SNS Bank and ASN Bank have created savings meters.

Divide the pocket money over two pots

It’s important to learn that the more you buy in between, the longer it will take you to reach the goal. Yet it is not at all bad if wishes come in between. Later when they grow up, they won’t be able to save everything either.

You can therefore choose to give your child two pots where the pocket money can go in: one from which he or she can take money to buy something and one where the savings go in for the great cause.

Make clear agreements

It also helps to make clear agreements about what your child can and cannot buy with his pocket money. For example, agree that they must first consult with you if they want to buy toys above a certain amount. Or that they sleep on it first.

A pocket money contract can help you make these kinds of agreements. Here you put how much and when your child will receive the pocket money and what may or may not be bought with the money. Dad, mom and the child sign below. If a discussion arises later than that, you can take up the contract. Tip: you will find many nice pocket money contracts on the internet.

Do not use the pocket money to punish and reward

Your child’s pocket money is a means of teaching him or her how to handle money. It is the basis for learning to handle money well. Nibud therefore recommends never using it as a means of punishment and reward. It should be a permanent fixture. It is like with a salary: they receive a fixed amount per period and they have to manage that.

This way you prevent your child from becoming a spoiled brat

Tessa Ham is an editor at WorkJuice.nl and writes for Metro about career and money.

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7 tips to teach your child to save with his pocket money

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