Since navigating a pocket money /commission system in our household, the change in our family dynamics has been extremely positive. I pay my daughters (aged 6 and 9) a small fee for specific tasks, additional tasks and financial rewards for special achievements. Every week we keep a tally and total on a Sunday morning. Sometimes I calculate and other Sundays I let them calculate the total and allocated percentages for give, save, and spend. If I told you they calculated the sums every Sunday I would be lying. This is work in progress.
COMMUNICATION AND INFLUENCE SKILLS FOR PARENTS OMG! I have learnt so much in the past six months and realize I need to hone my communication and influencing skills. Using a pocket money system tests my skills as parents every day. It’s been hard work and rewarding and I’m learning every week. I give myself a 6/10 for influence and communications at the moment.
LEARNING THE VALUE OF MONEY This is so important. My daughters are learning they need to save for bigger ticket items and have pride in everything they have purchased. They are learning once money is spent it is gone and they need to earn money by working for it.
GIVING MENTALITY 10% of all money my daughters earned is saved for giving. Growing up my family was heavily involved in charity work. Every second weekend I was selling honey or working at a fair of some sort to raise money for a charity my father was the president of. I am used to giving time, as opposed to hard cash. Saving cash to give is teaching me and my daughters’ to serve the less fortunate with financial assistance.
MONEY LESSONS If someone buys you something that you don’t like, it’s not always a big deal – you give it away, bin it or don’t use it. If you buy something you don’t like, you feel it more! Money wasted! It hurts a lot more if it’s your money doing the buying. Children need to spend their own money to learn these lessons. The same goes when you buy something that in hindsight you feel was overpriced.
ENTITLEMENT BUSTER Entitlement is an ugly word right? And yet we breed this in our kids when we buy buy buy buy for them. Before we know it, we are calling them spoiled. We should be apologizing to them, not hurtling an insult that we created. Truth.
SERVING MENTALITY When your child sets the table for the family, folds family washing, unpacks the dishwasher, this teaches them pride in family teamwork and to serve others in the house. When they are paid for this, it is extra motivation and they learn about money at the same time. It’s a double bonus. Why hold back this teaching moment. Multi task parenting I say!
LEARNING NEEDS FROM WANTS The earlier children are taught this the easier! It’s a lot easier to explain to a six year old she cannot have everything she wants than to a 10 year old. Why? A 10 year old has had 4 more years of getting more than she should have. When children have a limited amount of money to spend on items, you can use your persuasion and influencing skills to explain why they can hold off on the want items i.e. you can ask for this for your birthday, Christmas is coming, use your money to purchase the things you really need etc.
SMART HABITS Repetition is the key to building and maintaining habits. At the start of a pocket money/commission system, remember new rituals will not happen over night. It will take time. Gentle reminders and appreciation for efforts is important. Don’t scream and rant like I did at the start. It does not work!
The smart habits children learn are: daily household chores, making a list before shopping, buying what you need first and practicing delayed gratification (these are just a few). The last one is huge; I have not even listed delayed gratification on the list of ten. Think of it as bonus point 11. Oh, and dare I say the habit of learning how to budget. Bonus reason 12!
RESPONSIBILITY Agreeing tasks and the frequency gives your children responsibility and also independence. Doing everything for a child tells them they are not capable of looking after themselves and they do not have the skills to complete household chores. Don’t worry if you are doing too much for your child now, this is where I am here to help you.
IMPROVED FINANCIAL AWARESNESS A commission/pocket money system has benefits for parents as well. As we teach our children important life skills of independence, responsibility, giving etc., it creates awareness as to what financial habits we can improve on. I am learning and striving every day to be better with my financial habits. I have no shame in talking about this. People spend a lot on health and fitness every year, it’s important to also learn financial fitness. Just like the old saying goes, you are what you eat, and I guess you can also say, you are what you buy!
I would like you to Google pocket money for children, commission system for children, and allowance for children. Make yourself a nice cup of tea or coffee and allocate thirty minutes for this. When you have completed this task, please list down any reasons why you should not have a pocket money system in your household. Thank you.