Helping kids learn to save

I felt we’d gained some headway today on reinforcing the you-only-get-pocket-money-for-the-work-you-do new rule in our house today. We implemented it not so long ago. Maybe a few days back, after we’d read this new report published by the Royal Economic Society about research conducted on children and patterns of saving/financial sense. And to be fair, up till this point, we have been quite dismayed at the children’s lack of financial sense, spending their pocket money straight away for instant gratification rather than to save up for the things they really want.

Take tablets for example. In our home, we have two (rather outdated now) ASUS TF101 tablets – me and my husband use them. We just never thought we should be buying such expensive toys for kids. But boy do the kids fight over them almost everyday. I didn’t like the fighting, and I often hoped they would find something else to do with their time.. but they didn’t. So I figured out a way which would be to up their pocket money and let them work for the pocket money (by doing some light household chores for us like tidying their rooms, helping clean up the lounge, cleaning the bath or the sink, etc.) if they are willing to do so.

So instead of doing what we used to do, which was to give each of them £2 a week regardless of what they did, we now say to them that there are £3 worth of pocket money a day, up for grabs. Now if all of them wanted to do work for us in a day, then the £3 would be split between them so each gets £1. If only 2 of them wanted to do work that day, then the £3 would be split between the two so each gets £1.50. If only one of them wanted to do work that day, then he/she gets the full £3. And if nobody wants to do any work for us, then nobody gets anything.

Simple?
That means though, that if they wished to work everyday for the money, they could possibly earn around £30 a month each. Which would enable each of them to have saved enough for a Google Nexus 7 tablet, say, in just under 6 months’ time. And if they wanted Apple iPads or something, well that would require just under 12 months of savings (and daily work) to save up enough for one.  Hell, me and my husband are not even happy to splurge on an iPad on ourselves! Let alone buy for our kids such an expensive gadget that breaks easily!
It’s really quite a lot of money to be giving children for pocket money to us. None of our immediate families ever gave their children as much as £30 a month at the age our kids are at. And of course we would still pay out on top of pocket money for anything which we feel is educational and we’d be happy to pay out for – stuff like dancing or music lessons, books, that sort of thing.

So yea… It’s only been in effect 3 days so far. On the first day, all 3 kids were eager to help out with chores to earn their £1 each. Yesterday my 2 girls both didn’t want to do any cleaning up, and only my little boy did, so he got the full £3. Today, after they’d been fighting over the tablets at home in the afternoon, with the memory of fighting for the tablet fresh in their heads, they’ve agreed to work for the pocket money quite eagerly by evening time.

I’m sure there’ll be days in the future when they don’t feel like working for the money. And days when they will. Whatever it is though, it is our hope that they will learn the value of holding back the desire to spend fruitlessly on very short-term goals. By associating the household chores with pocket money they earn, we are trying in effect to replicate something of adult life in a way. So if kids learn to see that the money they have comes from work, they might be less tempted to spend it all so soon… and might somehow be able to carry that mentality into adulthood.

Saving is such a good skill to learn. And these things start young. Few people go from being splurgers to being savers. The problem is that once one develops a habit of spending and not living within one’s means, the spending can go overboard and cause one to be saddled with long-term debt. (I speak from personal experience)

But… if my kids don’t feel like working for money sometimes, that’s okay too.

I am prepared to pick up the rubbish off the floor myself if they don’t want to. It is my problem, after all… since it bugs me most.

And its not a big job.

We live in a flat.

 

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