Wednesday, April 24, 2024

How to help your child earn and manage their own money

To learn to ride a bicycle, you need a bicycle. To learn to play the guitar, you need a guitar. This is no different from money. To learn to manage money, you need money. 

With children spending more time at home than at school due to the COVID-19 pandemic, parents should be looking out for teachable moments of how their children can earn and manage their own money. 

This is how you can help your child earn and manage money wisely:

Entrepreneurship

If your wish is to raise a problem solver, then teaching your child entrepreneurship skills would be a great idea. Allow your child to come up with all sorts of crazy ideas of how they would want to solve existing problems in order to make extra cash. Let them surf the internet, talk to friends and family about their daily challenges. This will give them an idea of the kind of problems people struggle with. Remember that an entrepreneur is someone who turns challenges into opportunities.

You may help them identify their talent and passion. It could be art – designing items for home decor, music – teaching other children to play a music instrument, recycling waste paper to make greeting cards, gardening and selling flower seedlings, etc. With the internet, it is a lot easier to come up with a business idea. By starting and running their own business, your child will learn to be confident in his/her abilities. Through entrepreneurship, your child adopts innovative thinking, and this is the most sort after skill in today’s digital economy. 

Allowance or Pocket-money

An allowance or pocket money is the money you give your child on a regular basis for personal spending. It may be for entertainment, buying snacks at school or spending it on a rainy day. Deciding to give your child an allowance or pocket money is a family decision. It should be viewed as a teaching tool because it provides an excellent opportunity to teach your child practical money lessons.

Telling your child about the benefits of saving is somewhat different than getting them to experience it by saving part of their pocket money. By learning to save their own money, they learn valuable lessons of delayed gratification and financial discipline. They will also learn from making mistakes. At first, they will squander the money, but with time they will get to appreciate the consequences that come with that. Ultimately they will appreciate that a mistake is an opportunity for growth. 

Commission for chores

This is where your child earns a commission from doing certain household chores. This is a controversial one. Some parents argue that it is not appropriate to pay a child for doing household chores. My mother was one of them. The issue is always, “What if your child one day decides they no longer want the money? Clearly, they will refuse to do the work”. Other parents who are for the idea believe paying a child for doing certain chores teaches them the relationship between hard work and money. Nonetheless, there is no right or wrong answer. At the end of the day, the decision lies with the parents. What is most important is to allow your child to learn good money habits from experience. 

Declaimer: Otisitswe K. Tawana-Madziba is the founder of Fin-Edu. 

For comments kindly send an email to [email protected] or visit www.fin-edubw.com.

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