Pocket money is a small amount of money given to a child by its parents, typically on a regular basis. Like the two sides of a coin, it has both pros and cons. As a proverb goes, an empty pocket teaches you a million things in life, but a full pocket spoils you in a million ways. The number of parents giving pocket money to children has risen several folds in the past two decades. In fact, it is better to provide pocket money than just to make them understand the importance of saving money and managing expenses.
“The lack of money is the root of all evil,” said Mark Twain. As parents, it is mandatory for the good of your child to always give a limited amount of money and, to ask them to maintain an account of the money spent. The balance between the money given, saved and spent with proper records will help your child learn a lot about money management.
“Giving your children an allowance teaches them how to manage money, and this will come in handy throughout their lives. Even if your kids make a bad decision, they will learn in a safe environment, as the sum involved is little. Your kids will learn budgeting, saving and spending. They will learn to look after their money. The advantages of giving your child an allowance are tremendous, so don't slack off,” reads on excerpt from the article ‘Pocket money’ published in India Parenting.
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Having spoken to lots of parents over the last few years, we have been able to collect plenty of wisdom on why making the decision to give pocket money is a good thing, and how it can help your children in the future. So here are our top tips!
Children who receive pocket money are more likely to develop strong financial planning skills in later life and are much less likely to be in debt, according to a pan-European study of more than 12,000 consumers across Europe.
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